SEC mulls civil sanctions

SEC mulls civil sanctions

Insider trading faces tougher penalties

The Securities and Exchange Commission (SEC) is considering imposing civil sanctions, meaning tougher penalties, for unfair securities trading practices such as insider trading and share manipulation. The criminal law for fraud will be maintained.

The new rule would allow the SEC to fine offenders up to three times the amount of benefits received, said Somchai Pongpattanasin, SEC assistant secretary-general.

The current law governing unfair trading practices sets the maximum fine at two times of offenders' benefits but grants a 50% discount as clemency if offenders decide to settle the case.

The civil sanctions law is pending approval by the National Legislative Assembly (NLA) after it was approved by the cabinet.

"Civil sanctions together with a blacklist would be effective mechanisms to crack down on unfair trading practices. Such cases typically take a long time to process," he said.

The SEC said unfair trading practices also extend to the disclosure of false information, rumours and leaking information before it is disclosed to the Stock Exchange of Thailand.

The SEC also expects to impose more penalties, including a blacklist, in July for listed companies' executives found guilty of unfair securities trading. The bid to toughen the penalties came after three top executives of the 7-Eleven convenience store chain operator CP All Plc and an executive of True Corporation Plc were fined a combined 33.3 million baht by the SEC for using inside information for their own benefit.

He said the SEC will continue to cooperate with other organisations, especially the Department of Special Investigation and the Anti-Money Laundering Office. Tracking down culprits should take less time in the future as these organisations will not need to repeat probes already completed by the SEC, said Mr Somchai.

"Investors are more aware of corporate governance. Listed companies must treat stakeholders and general investors in a fair manner," he said. "The SEC has increased the degree of punishment to meet market demand."

A class action law won approval from the NLA last year, which should give investors more protection, said Mr Somchai.

In related news, the SEC asked the media to be more aware of publishing news that could violate SEC rules and regulations, especially regarding share manipulation.

"Media outlets should be more careful in releasing news that could affect share prices. News should be based on facts. Management can talk about their companies' future revenue but should avoid talking about profit before informing the SET, with the exception of long-term business plan forecasts," he said. It is monitoring information on stock-related websites, Line, Facebook and social media that breaches SEC rules.

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