MANILA, Philippines – The Securities and Exchange Commission (SEC) is proposing more stringent sanctions on entities proven guilty of insider trading.
In a statement on Wednesday, April 3, SEC Chairperson Teresita J. Herbosa said the commission is including in its proposal amendments to the Securities Regulation Code (SRC) over “disgorgement of profits.”
Under the disgorgement of profits, the courts will require those found to have profited from illegal or unethical business transactions to repay their ill-gotten wealth plus interest.
“We’d like to strive for a fair and honest capital market. We’ll probably be able to achieve that through vigorous prosecution of securities law violators as well as the imposition of stiffer fines and penalties,” Herbosa said.
The SEC has vowed to step up its enforcement after beefing up its surveillance efforts. It has acquired its own surveillance system to better prevent and curb fraudulent trading activities.
It also signed an agreement with the Korea Exchange (KRX) in February for a cutting-edge market surveillance system that will cover both the bond and stock markets.
The disgorgement of profits has become a potent tool for the United States SEC as it ordered a Chinese couple to disgorge over $800,000 of their ill gotten gains from insider trading on Nexen Inc. and its acquisition of the China-based CNOOC Ltd.
The Hong Kong-based firm Well Advantage that profited from the trading of Nexen Inc. had previously settled with the US SEC for insider trading and paid $14.2 million.
The SEC has said it is investigating nine cases of insider trading in 2012 that included Alcorn and Calata Corp.
The investigation that the SEC is conducting on Calata Corp. for the alleged price manipulation of shares of listed agribusiness firm Calata Corp. need 10 more months to complete.
This even if the regulator has already filed a criminal complaint in November 2012 against 13 individualsinvolved in this high-profile stock market manipulation probe. – Rappler.com
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