SEC to add teeth with new penalties

SEC to add teeth with new penalties

The Securities and Exchange Commission expects to announce this month heavier penalties -- probably to include a blacklist -- for listed-company executives found guilty of unfair securities trading practices, a senior SEC official says.

Blacklisting executives of publicly traded companies is more of a social sanction at the moment, but the mechanism could possibly be included in the revised punishments, said assistant secretary-general Waratchaya Srimachand.

The bid to tighten penalties for unfair trading practices comes after three top executives of CP All Plc and an executive of True Corporation Plc were fined a combined 33.3 million baht for improper use of inside information.

The four -- CP All executive chairman Korsak Chairasmisak, vice-chairman Piyawat Titasattavorakul and vice-chairman Pittaya Jearavisitkul, and True vice-chairman Athueck Asvanund -- used insider knowledge to buy shares of cash-and-carry giant Siam Makro Plc ahead of CP All's announcement that it would buy out Makro at above-market value.

The SEC is discussing what should be the proper civil penalty for unfair trading practices by listed-company executives. The current law stipulates that the penalty is halved if the wrongdoers plead guilty.

"Sometimes what wrongdoers receive is still higher than the fine when the penalty is reduced by half," Mrs Waratchaya said.

In related news, the SEC is drafting an institutional investor code to serve as guidelines for when executives of listed companies are found guilty of insider trading or violating SEC rules and regulations.

Under the code, institutional investors must communicate with listed firms to find solutions and act for the benefit of shareholders or fund members.

In reference to recent volatile price movements in Jasmine International (JAS) shares, Mrs Waratchaya said the SEC was monitoring the case.

She said JAS did not disclose whether its planned 6-billion-baht stock buyback would take into account the company's first instalment payment for a 900-megahertz spectrum licence due on March 21.

Moreover, the buyback price remains unclear, as JAS's board of directors will rule on the issue at its meeting this month.

Meanwhile, eight groups have agreed to take action against what they view as poor practices by boards of directors.

The groups are the SEC, the Stock Exchange of Thailand, the Federation of Accounting Professions, the Association of Investment Management Companies, the Government Pension Fund, the Thai Listed Companies Association and the Thai Investors Association.

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