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Stock exchange: Punishing share price manipulators

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Criminal laws exist but not enforced so first step: quick fines & warning to protect public, then criminal penalties for repeat offenders. 

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CAPITAL MARKETS

Civil fines backed for schemers

Kittiratt: Regulators should have leeway
22 Apr 2013
Wichit Chantanusornsiri

Share manipulators should be subject to civil penalties as well as criminal punishment, says Finance Minister Kittiratt Na-Ranong.

Mr Kittiratt said he agreed in principle with the idea of making parties found guilty of manipulating share prices subject to civil fines to raise local enforcement standards in line with international practices.

But he added that Thailand needed to improve in many areas, including transparency within the justice system to ensure fair treatment for the public from the state.

Under the SEC Act, share manipulation is a criminal offence, subject to up to two years in jail and a minimum fine of 500,000 baht.

That we only have criminal penalties under the 1992 SEC Act leads to a few shortcomings. For one, the punishment is too severe [for small-time offenders] and the process takes a long time," said Mr Kittiratt, a former president of the Stock Exchange of Thailand.

He cited a hypothetical case of a junior executive overhearing insider information that he later uses for his own investment benefits.

Under the existing law, such an act is a criminal offence.

By expanding the scope of the law to include civil penalties, market regulators will have greater flexibility in determining the appropriate action to take against share manipulators, Mr Kittiratt said.

First offenders, for instance, could be subject first to civil fines, and then penalised with criminal sentences for repeat offences.

A proposed amendment would set civil penalties at up to twice the benefits received from a manipulation.

The Securities and Exchange Commission, which is drafting proposed amendments to the SEC Act, has argued that making share manipulation subject to both civil and criminal liability would help improve efficiency in the enforcement process.

The SEC is the primary enforcement agency for the Thai capital market. But current law requires securities regulators seeking to file a case to do so through either the Department of Special Investigation or the Economic Crime Division of the Royal Thai Police, depending on the type of crime

After an investigation, the DSI or the police must then forward the case to the Attorney General's Office before sending the case before the court, a process that can take years before all appeals are exhausted.

(Source: Bangkok Post, FINANCIAL MARKETS, Civil fines backed for schemers, Kittiratt: Regulators should have leeway, 22 Apr 2013, Wichit Chantanusornsiri, link)


Capital Markets Regulation Vcoabulary

capital markets - the group of markets and stock exchanges where companies and governments sell stock shares and bonds to get the money they need to run their business (See Wikipedia)
capital - money invested in a business

insider information - secret information which is known by people who work for a company but not known outside company (See Wikipedia)

civil - of a case filed a court that deals with non-criminal matters, especially complaints made by people against other people or organisations คดีที่ยื่นฟ้องต่อศาลแพ่ง

criminal - about the breaking of the law, unlawful and illegal activity เกี่ยวกับอาชญากรรม
criminal punishment

fines - when you have to pay money as punishment for breaking the law
civil fines

backed - supported ให้การสนับสนุน
schemers - people who use some system in the wrong way for their own benefit

Civil fines backed for schemers

leeway - flexibility

regulators
regulators should have leeway

manipulation (noun) - controlling or influencing something for personal gain (illegal or immoral)
stock market manipulation - when big stock traders control the price of stocks for profit การปั่นตลาดหุ้น

manipulate (verb)
manipulating share price

manipulators - big stock traders who profit from controling the price of stocks
share manipulators

penalties - บทลงโทษ
criminal penalties

civil penalties
subject to civil penalties

Share manipulators should be subject to civil penalties as well as criminal punishment.

principle - a basic belief, theory, or rule that has a major influence on the way in which something is done หลักการ
agreed in principle - agree with the idea (but no promise to do anything)

guilty - proven to have committed a crime; having been decided by a court of law that you committed the crime your were accused of มีความผิด
found guilty

parties - people, companies, organisations entering into some arrangement or deal
parties found guilty

standards - an acceptable level of quality or achievement มาตรฐาน a rule for behaving which should be obeyedบรรทัดฐาน, กฎเกณฑ์, กรอบ
raise standards

enforcement - making sure a law is obeyed and punishing people if it is not obeyed บังคับใช้กฎหมาย
enforcement standards

local - in or related to the area that you live, or to the particular area that you are talking about ท้องถิ่น
local enforcement standards

in line with - following, agreeing with

international - between countries ระหว่างประเทศ 
practices - common ways of doing things
international practices

Mr Kittiratt said he agreed in principle with the idea of making parties found guilty of manipulating share prices subject to civil fines to raise local enforcement standards in line with international practices.

justice - fairness in the way people are dealt with  ความยุติธรรม  (See Wikipedia)
justice system

transparency - visible to the public, easy to understand, no secrets or hidden things ความโปร่งใส
transparency within the justice system

improve - to make better ทำให้ดีขึ้น
improve transparency within the justice system

treatment - การรักษา
fair treatment
fair treatment for the public

state - government รัฐ
fair treatment for the public from the state

ensure - to make certain that something happens or is done รับรอง ให้ความมั่นใจ  ให้การยืนยัน 
ensure fair treatment for the public from the state.

But he added that Thailand needed to improve in many areas, including transparency within the justice system to ensure fair treatment for the public from the state.

share manipulation
minimum fine

offence - a crime or illegal activity for which there is a punishment การกระทำผิดกฎหมายหรือข้อบังคับ
a criminal offence
under the existing law, such an act is a criminal offence

offenders  - people who break the law
small-time offenders -
people who break a law without serious penalty

fine - an amount of money that you have to pay because you have broken the law ค่าปรับ
Under the SEC Act, share manipulation is a criminal offence, subject to up to two years in jail and a minimum fine of 500,000 baht.

severe
- very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง
the punishment is too severe

process - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
the process takes a long time

shortcomings
- faults and weaknesses that a person or thing has

That we only have criminal penalties under the 1992 SEC Act leads to a few shortcomings. For one, the punishment is too severe [for small-time offenders] and the process takes a long time

executive
- the highest level managers in a company
junior executive

overhear - to hear things that other people are saying (by accident, they are not talking to you) 
overhearing insider information

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
benefits - goods things that can happen from an activity ผลประโยชน์
use insider information for his own investment benefits

hypothetical - an example of something that is possible (may not actually exist yet)
hypothetical case
a junior executive overhearing insider information that he later uses for his own investment benefits.

cited - mentioned as an example, explanation or proof of something else กล่าวถึง
cited a hypothetical case

He cited a hypothetical case of a junior executive overhearing insider information that he later uses for his own investment benefits.

regulators - the government agencies that make rules and laws and regulations about how businesses can operate for different industries (food, drugs, banking, transportation, commerce) and then check to see if they are being followed
market regulators

flexibility - can change easily and adapt to new situations and conditions as they occur ความยืดหยุ่น
greater flexibility in determining the appropriate action to take against share manipulators

By expanding the scope of the law to include civil penalties, market regulators will have greater flexibility in determining the appropriate action to take against share manipulators, Mr Kittiratt said.

First offenders, for instance, could be subject first to civil fines, and then penalised with criminal sentences for repeat offences.

proposed - suggested (but not yet chosen or decided upon)
amendment - a change in a law
proposed amendment would set civil penalties at up to twice the benefits received from a manipulation.

drafting - writing for the first time (will be changed before the final version, final document)
drafting proposed amendments to the SEC Act

liability - (legal) responsibility for something or someone ความรับผิดชอบ
civil and criminal liability

efficiency - waste little time, energy and resources in doing a task (minimize time, energy and resources in performing a task) (See glossary) การทำงานอย่างมีประสิทธิภาพ คุ้มค่าเวลาและใช้พลังงานหรือต้นทุนในการผลิตน้อย เพื่อให้ได้ผลผลิตมาก
efficiency in the enforcement process.

The Securities and Exchange Commission, which is drafting proposed amendments to the SEC Act, has argued that making share manipulation subject to both civil and criminal liability would help improve efficiency in the enforcement process.

primary - first and most important
the primary enforcement agency for the Thai capital market

file - to take official action, in this case, to make an official complaint ยื่นคำร้อง
file a case
file a case with the police or DSI

current - of the present time ปัจจุบัน
current law
current law requires securities regulators to file a case with the police or DSI

The SEC is the primary enforcement agency for the Thai capital market. But current law requires securities regulators seeking to file a case to do so through either the Department of Special Investigation or the Economic Crime Division of the Royal Thai Police, depending on the type of crime

forward - send some document or case to another person to deal with or process
forward case - send a legal case to someone else to deal with
forward the case to the Attorney General's Office

appeals - when you ask a higher court to change the decision of a lower court
exhaust - use up everything you have
exhaust appeals -
use up all your appeals (to higher courts to change decision of lower court, so must accept legal decision)
all
appeals are exhausted

investigation - try to find out what happened during an event, discover the truth การสอบสวน การตรวจสอบหาข้อเท็จจริง

After an investigation, the DSI or the police must then forward the case to the Attorney General's Office before sending the case before the court, a process that can take years before all appeals are exhausted.

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