ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has unearthed a cybercrime racket and caught red-handed a person for cheating small investors in stock markets.

After a sophisticated surveillance operation and a detailed investigation, the SECP acted against a self-styled stock market investment guru who gave self-serving investment tips to the people on social media, a spokesman told Dawn on Monday.

Giving details of the operation, he said that the suspect used to defraud small investors through what he called a ‘pump and dump strategy’.

“He would buy a large quantity of shares of a company and then tell his social media followers and friends that the financial prospects of the company had greatly improved,” the spokesman said.

“When his social media followers rushed and bought the stocks, he would sell his own holdings and used to repeat this activity several times and by doing so the accused earned a profit of Rs58 million within six months.”

The SECP, in its endeavour to combat financial fraud, including cybercrime, is spearheading an initiative aimed at forming a high-level financial cybercrime prevention committee comprising the heads of the SECP, SBP, FIA and NAB to carry out proactive and broad-based enforcement action against criminals.

Such collaborative efforts of financial sector regulators and law-enforcement agencies are now widely prevalent in a number of global jurisdictions, and have been successful in the fight against cybercrimes.

The spokesman said that in the current intertwined world, cyberspace presented a strong platform for financial criminals and scam operators to defraud the people at large, while also adversely impacting regulated activities being undertaken by legitimate and licensed operators.

He said the SECP had been closely monitoring this emerging threat and had adopted a multi-pronged approach to tackle these illegal activities being undertaken through the cyberspace.

In this regard, the SECP, through two letters to the Federal Investigation Agency, one in September last year and the other in April, forwarded lists of names of 32 and 42 such illegal operators, respectively.

The FIA is currently investigating these names and will be taking the requisite action in due course. In addition, the SECP has also reached out to the National Bank of Pakistan to use its branches’ network to identify such illegal operators all over the country. Furthermore, a request has been made to the State Bank of Pakistan to issue a circular to all branches to pay special attention to any incidence of unlicensed currency, commodity and financial trading activity going on in their areas of responsibility.

Published in Dawn, May 09th, 2017