SEC files action against several individuals for market manipulation

Aug 20, 2019 (LBO) – Securities and Exchange Commission of Sri Lanka (SEC) has filed an action before the Fort Magistrate’s Court against several individuals for market manipulation.

The full statement is reproduced below.

SEC FILES ACTION FOR MARKET MANIPULATION

The Securities and Exchange Commission of Sri Lanka (SEC) on 25th July 2019 filed action before the Fort Magistrate’s Court against Mr. Lanka Kannangara, Mr. Fariq Furkhan, Mr. Kapila Senarath Bandara, Mr. Raveendra Mallawarachchi for market manipulation, conspiracy to commit market manipulation and aiding & abetting with respect to the shares of Radiant Gems International PLC (RGEM) listed on the Colombo Stock Exchange during the period 2nd to 29th September, 2011.

If found guilty the defendants shall be liable to an imprisonment of either description for a period not exceeding five years or to a fine not less than fifty thousand Rupees and not exceeding ten million Rupees or to both such imprisonment and fine.  

The aforesaid defendants being investment advisors of different Stockbroker firms, had placed orders in the RGEM share using the CDS accounts of certain clients of such Stockbroker firms during the period 2nd to 29th September 2011, by the use of several manipulative devices. Such share trading executed by the aforesaid defendants has 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). 

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