SEC seeks broader investigative reach

The Securities and Exchange Commission (SEC) is preparing to amend the Securities and Exchange Act to give itself broader investigative authority and the ability to provide additional protections to witnesses.

Being an inquiry officer as well as a regulator empowers the SEC to write its own cases for prosecution, making the law enforcement process faster and more efficient, said SEC secretary-general Ruenvadee Suwanmongkol.

The law does not permit the SEC to be the investigator of violations of the Securities and Exchange Act. A lawsuit must be filed by the Department of Special Investigation if damages exceed 100 million baht, and by the Economic Crime Suppression Division if less than 100 million baht.

The SEC has been the primary regulator of the law for many years, but the agency lacks investigative power.

The commission has said that if it became an “investigation officer” with permission to write prosecution cases, the scope of law enforcement in capital markets would be wider and implemented faster.

Ms Ruenvadee said the SEC has long been the capital market regulator, enforcing and prosecuting capital market lawsuits for decades, but it has not been an investigative officer.

The amendment is expected to be offered to the SEC’s board of directors, then to the finance minister during the first quarter of next year.

This will be the seventh amendment since the Securities and Exchange Act went into effect in 1992.

Ms Ruenvadee said the SEC will also add a section on the protection of witnesses. Moreover, the accounting auditor and accounting office related to the capital market will also be under the jurisdiction of this law.

Separately, the SEC yesterday signed a memorandum of understanding with the Civil Case Office and the Attorney-General’s Office to enforce civil sanctions in capital markets, as well as academic cooperation and channels allowing personnel to exchange knowledge.

In 2016, the SEC began enforcing civil sanctions to provide a faster track for enforcement than criminal trials, which need to be proven beyond a reasonable doubt.

Under civil proceedings, offenders often must pay a fine.

Since civil sanctions were introduced on May 31 of this year, there have been 44 cases of civil sanctions (related to 244 people), of which 30 cases had letters of consent signed with total fines of 1.28 billion baht.

In 14 cases, the offenders did not pay the fines and the SEC has filed additional lawsuits. In those 14 cases, one case was terminated by a court judgement ordering the offender to pay the fine. Four cases are in the Court of Appeals and two are in the Court of First Instance.

The remaining seven cases are in the process of coordinating the prosecution.