| Case ID |
0b0a5505-4bd5-421b-8af1-5494260a6e08 |
| Body |
View case body. Login to View |
| Case Number |
|
| Decision Date |
Jun 22, 2006 |
| Hearing Date |
May 08, 2006 |
| Decision |
The Securities and Exchange Commission of Pakistan concluded that both members of the Board of Directors of Crescent Standard Business Management (CSBM), Mr. Mahmood Ahmed and Siyyid Tahir Nawazish, violated Section 15A of the Securities and Exchange Ordinance, 1969 by engaging in insider trading. They exploited unpublished price-sensitive information regarding Crescent Standard Investment Bank Limited (CSIBL) to sell a total of 24.5 million shares to Javed Omar Vohra & Co. Limited (JOV) at prices significantly above the market rate, thereby avoiding losses for CSBM and causing financial harm to JOV and its shareholders. The Commission directed CSBM to compensate JOV an aggregate sum of Rs.182.435 million within 30 days, without prejudice to any further actions or prosecutions. This decision underscores the Commission's commitment to enforcing securities laws and maintaining market integrity by penalizing unethical trading practices. |
| Summary |
In the pivotal case of the Securities and Exchange Commission of Pakistan versus Mahmood Ahmed and another, detailed under citations 2006 SLD 410 and 2006 CLD 1167, the regulatory body addressed critical issues of insider trading within the Pakistani securities market. The Executive Director of the Securities Market, M. Arif Mian, presided over the case, which involved Crescent Standard Business Management (CSBM) and its executives, Mahmood Ahmed and Siyyid Tahir Nawazish. The Commission discovered that CSBM sold a substantial 24.5 million shares of Crescent Standard Investment Bank Limited (CSIBL) to Javed Omar Vohra & Co. Limited (JOV) at inflated prices of Rs.12.00 and Rs.11.98 per share. These transactions occurred shortly before CSIBL's financial mismanagement issues became public, leading to a sharp decline in its share price to Rs.4.55. By leveraging unpublished price-sensitive information obtained through their directorial roles, Mr. Ahmed and Mr. Nawazish manipulated the market to avoid personal losses and inflict financial damage on JOV and its shareholders. Despite defenses claiming adherence to legal procedures and good faith intentions, the Commission found these arguments unconvincing, highlighting the deliberate intent behind the transactions. Consequently, CSBM was mandated to compensate JOV Rs.182.435 million, reflecting the loss incurred due to the manipulated share prices. This case underscores the stringent measures taken by regulatory authorities to combat insider trading and ensure transparency and fairness in the financial markets. It serves as a precedent for future enforcement actions, emphasizing the importance of ethical conduct and adherence to securities laws to maintain investor confidence and market stability in Pakistan. The decision also illustrates the Commission's proactive stance in monitoring and regulating financial activities to prevent market abuse, thereby fostering a trustworthy environment for investors and stakeholders alike. As the financial landscape evolves, such rulings play a crucial role in shaping the regulatory framework and deterring malpractices, ensuring the integrity and robustness of the securities market. |
| Court |
Securities and Exchange Commission of Pakistan
|
| Entities Involved |
Securities and Exchange Commission of Pakistan,
A.F. Ferguson & Co.,
Crescent Standard Business Management (CSBM),
Mahmood Ahmed,
Siyyid Tahir Nawazish,
Javed Omar Vohra & Co. Limited (JOV),
Crescent Standard Investment Bank Limited (CSIBL),
Dossalani Securities,
First National Equities
|
| Judges |
M. ARIF MIAN, EXECUTIVE DIRECTOR (SECURITIES MARKET)
|
| Lawyers |
Not available
|
| Petitioners |
Securities and Exchange Commission of Pakistan
|
| Respondents |
another,
MAHMOOD AHMED
|
| Citations |
2006 SLD 410,
2006 CLD 1167
|
| Other Citations |
Not available
|
| Laws Involved |
Securities and Exchange Ordinance, 1969,
Securities and Exchange Commission of Pakistan Act, 1997
|
| Sections |
15,
15-A,
15-B,
10
|