SEC files action against 4 investment advisors for market manipulation

The Securities and Exchange Commission (SEC) yesterday said it filed action against four investment advisors for market manipulation in relation to the shares of Radiant Gems International PLC (RGEM) during the period from September 2 to 29, 2011.

Action has been filed before the Fort Magistrate’s Court against individuals named Lanka Kannangara, Fariq Furkhan, Kapila Senarath Bandara, Raveendra Mallawarachchi for market manipulation, conspiracy to commit market manipulation and aiding and abetting with respect to the shares of RGEM.
The defendants belonging to different stockbroker firms had allegedly placed orders in the RGEM share using the CDS accounts of certain clients of such stockbroker firms during the said period by the use of several manipulative devices.

Such share trading executed by the defendants had allegedly created a false and misleading appearance of active trading, with respect to the market and the price of the RGEM share, in contravention of Rule 12 of Securities and Exchange Commission of Sri Lanka Rules, published in 2001 (SEC Rules). 

Charges against the defendants are for market manipulation, conspiracy to commit market manipulation and aiding & abetting under provisions of sections 102, 113A of the Penal Code of Sri Lanka read with Rule 12 of the SEC Rules and Section 51(1)(a) punishable under Section 51(2) of the Securities and Exchange Commission of Sri Lanka Act No.36 of 1987 (as amended).  
 If found guilty the defendants shall be liable to imprisonment of either description for a period not exceeding five years or to a fine not less than fifty thousand rupees and not exceeding Rs.10 million or to both such imprisonment and fine.   

 Magistrate Ranga Dissanayake having taken cognizance of the submissions of Deputy Solicitor General Sudarshana De Silva of the Attorney General’s Department who appeared on behalf of the SEC, issued summons on the defendants to appear before the courts on August 28, 2019.