SEC to stiffen unfair trading penalties
The Securities and Exchange Commission (SEC) is set to tighten the penalty for listed companies’ executives found guilty of unfair securities trading practices.
The move follows strong public criticism over four of CP All’s top executives being slapped with only fines for insider trading.
Guidelines for new punishment are expected to be finalised this year, secretarygeneral Rapee Sucharitakul said.
He said the new penalties might be similar to those used for securities and mutual fund companies’ executives, banning them from holding management positions in any securities-related company if they were found guilty.
“The SEC’s board of directors would like us to tighten punishment against listed companies’ executives found guilty of unfair trade practices, as the current rules have been used for 10 years. But we cannot say at the moment how the law will be revised,” Mr Rapee said.
Unfair trade practices include insider trading, stock manipulation and fraud.
The SEC is allowed to fine only those employees who use unfair trade practices if they plead guilty.
The securities watchdog early last month announced four CP All executives — executive chairman Korsak Chairasmisak, vice-chairman Piyawat Titasattavorakul, vice-chairman Pittaya Jearavisitkul and Athueck Asvanund, a vice-chairman and group counsel of True Corporation — were fined a combined 33.3 million baht for using inside information to purchase shares of cash-and-carry giant Siam Makro Plc ahead of the 7-Eleven convenience chain operator’s notice it would buy out Makro at above-market value.
The group’s punishment has been criticised by the public as being too lenient.
Voravan Tarapoom, chairwoman of the Association of Investment Management Companies (AIMC) and the Federation of Thai Capital Market Organizations, applauded the move to tighten the penalties for listed companies’ executives, hoping they will match those for stock brokerage houses and mutual fund companies.
Investors now pay attention to corporate governance, she said.
Ms Voravan recently said the AIMC would wait until the end of this month to see whether CP All’s board would review its stance on the four guilty executives. Earlier, the company’s audit committee and independent directors said they would take no further action against them.
Mr Rapee said last year the SEC launched investigations for 70 alleged cases of stock manipulation, spreading rumours that led to speculation and insider trading, 14 cases of fraud by executives, 15 cases of unauthorised derivative brokers and three cases regarding other allegations.
It also examined 21 securities brokers, 16 mutual fund and other related companies, 129 listed companies, and instructed five listed companies to revise their financial statements.
He said the SEC, under its threeyear strategic plan running to 2018, will strengthen the capital market by enhancing the competitive efficiency and effectiveness of the stock exchange, brokers, mutual fund companies and agents. The SEC will amend rules to make them more practical, Mr Rapee said.
Separately, Mr Rapee hopes the Thai financial sector will pass World Bank and International Monetary Fund’s Financial Sector Assessment Program slated for 2019, as it will attract more offshore funds. The analysis assesses the Bank of Thailand, the SEC and the Office of the Insurance Commission.