SEC files action against market manipulation of Laugfs shares | Daily News


SEC files action against market manipulation of Laugfs shares

The Securities & Exchange Commission of Sri Lanka (SEC) filed action in the Colombo Fort Magistrate’s Court on November 5 against W.K.H. Wegapitiya, U.K. Thilak N. de Silva, and Thakshila I. Hulangamuwa over market manipu lation, conspiring to commit market manipulation, as well as aiding and abetting to commit the offence with respect to shares of Laugfs Gas PLC, a company listed on the Colombo Stock Exchange (CSE).

If found guilty, the defendants would be liable to an imprisonment of either description for a period not exceeding five years, or to a fine between Rs.50,000 and Rs.10 million. The aforesaid defendants, respectively, are the Chairman and the Managing Director of Laugfs Gas, as well as an investment advisor attached to a stockbroker firm, the SEC said in a press release, yesterday.

Orders had been placed for trading in the Laugfs Gas PLC shares on October 7 and 10, 2011, using the Central Depository System (CDS) accounts of certain clients of the stockbroker firm of the aforesaid investment advisor by the use of several manipulative devices.

Such share trading executed had created a false and misleading appearance of active trading with respect to the market and price of the Laugfs Gas PLC shares, in contravention of Rule 12 of the Securities and Exchange Commission.

Charges against the defendants have been filed for the violation of Rule 12 of the SEC Rules, which is an offence under section 51(1)(a) of Securities & Exchange Commission Act No.36 of 1987 (as amended), and is punishable under Section 51(2) of the said Act, read in conjunction with sections 102 and 113A of the Penal Code.

Justice Ranga Dissanayake, having taken cognizance of the submissions of 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 December 13.

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