BSEC seeks closure of 100 FB pages for share manipulation

The Bangladesh Securities and Exchange Commission in a letter on Monday requested the Bangladesh Telecommunications Regulatory Commission to close 100 Facebook pages for manipulating share prices by rumour-mongering.
The capital market regulator has found that the pages are being used to influence investors to purchase shares of different companies by providing false and baseless information, a BSEC official told New Age.
The official said, ‘Some of the pages are making forecasts on companies’ dividends before the decisions are made, while some others are predicting that prices of this or that scrip will increase to a particular level.’
‘We have also observed that some of the pages command a lot of influence on share market as they have large numbers of followers,’ he said.
The BSEC in the letter said the activities are violations of the securities law and requested the telecom regulator to take immediate action against 25 of the pages.
According to Section 17 of the Securities and Exchange Ordinance 1969, no person is allowed to induce, dissuade, effect, prevent or in any manner influence or turn to his or her advantage the sale or purchase of any security, directly or indirectly.
Asked, BSEC executive director Saifur Rahman told New Age, ‘We have conducted investigations into the matter based on investors’ complaints and have found a large number of Facebook pages engaged in manipulating share prices by spreading rumour and baseless information.’
‘Following the findings, we have requested the BTRC to seal the pages,’ Rahman said.
According to the BSEC investigations, Bangladesh Stock Market Share Business, a Facebook public group, has 43,080 members,
while the FB groups named DSE Club, DSE for Risky Game, DSE Current Data Analysis News, and DSE Investors Club have 39,911, 33,854, 23,163 and 22,195 members respectively.
Stockbrokers confirmed that the capital market has largely been rumour-driven, an investment approach that has become one of its major drawbacks.
Asked, another BSEC official said the commission will seek further help from the BTRC to prevent insider trade and syndication in share transaction by tracking telephone communications of suspicious investors.
The special tribunal formed to deal with stock market-related cases on August 3 last year sentenced stock tipster Mahbub Sarwar to two years in jail for manipulating share prices during the 2007-10 share market bubble through Facebook. Sarwar used about 10 Facebook pages and blogs to spread tips on stock prices among a large number of investors during that period.
The tribunal on August 17 of the same year also jailed Bangladesh Welding Electrodes managing director Nurul Islam and the then weekly Industry editor Enayet Karim for three years on charge of manipulating share prices of the company in 2007.

News Courtesy: www.newagebd.net