ISLAMABAD, July 16: A team comprising US forensic investigators and Securities and Exchange Commission of Pakistan (SECP) officials is set to begin a probe into the March 2005 stock market crash from Monday (today).
“The team is ready to start forensic investigations from Monday,” SECP chairman Raziur Rehman said on Sunday.
The chief of the country’s top corporate watchdog decline to reveal how many or which of the SECP officials had been included in the team but said: “This would be a strong team”.
Commenting on statements issued by some senior government officials suggesting that the task force’s report on the stock market crash had not mentioned names of some high-profile brokers, Mr Rehman said: “The report has been in the public (domain). It was available on the SECP’s website. So, if it mentions any broker’s name, we will definitely follow them”.
An independent task force set up to review the stock market situation had presented its report in August 2005. It contained names of a dozen high-profile brokers believed to be involved in manipulating the carry-over transaction (CoT) and short-selling.
The task force was headed by Justice (retd) Salim Akhter and comprised Dr Zubair Khan, Shahid Kardar and Sultan Allana.
The task force had also recommended hiring forensic investigators.
The investigation team would focus on alleged manipulation by Badla providers in the stock exchanges, and recommend steps to the SECP to fight back such crimes.
Sources in the SECP said that the US team comprised forensic accountants, data mining consultants and fraud risk management specialists. Their job would be to explain and analyse the cause and effects of the KSE crash in March last year.
“There job is objective verification. They would gather information upon both the evidence of share transactions and the existing legal framework,” an official source said.
The source said the SECP had also started drafting a new law to provide a legal framework for forensic investigations and enforcement in the country’s stock exchanges. The law would provide for disciplinary action against manipulators including fines, stricter penalties for insider trading besides defining market abuses and making the fraudulently-induced trading in securities an offence.
