SEC: Anti-insider trading measures firmly in place

MANILA, Philippines — The Securities and Exchange Commission is trying in earnest to curb insider trading to realize the state objective which is to minimize, if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market, the SEC said in a written reply to The STAR.

For instance, the SEC said that it monitors the market and looks for the daily unusual movements in price or volume that could trigger further fact-finding by the technical staff.

Among the measures implemented by the SEC through the Enforcement and Investor Protection Department are:

Monitor market developments on a daily basis on trading days, movements of all listed issues assigned to them via the PSE website, Technistock Software System and other market tools and reports submitted to the SEC during the course of tradings.

Download and save the disclosures for monitoring of price and volume movement of the particular listed issue.

Checks relevant blogs, websites, finance/stock market forums for postings, new and rumors on the stock market.

Makes a determination whether the particular news article influenced the movement as to price and volume of the listed issue.

If the answer to the above question is yes, the staff will ascertain whether the price and volume increased or decreased before the disclosure.

Technical staff then evaluate the downloaded trade file of the listed issue.

Technical staff will check on the basis of trading data whether there appears to be red flags, unusual trading activity or possible trading-related irregularities, such as, but not limited to. Issues that accumulate and reach the trading price threshold set on three consecutive days; issues whose trading prices and volume turnover are consistently increasing and decreasing for successive days, but whose prices do not necessarily breach the threshold limit, etc; and buying/selling transaction concentration that can be attributed to a particular client code.

The SEC said it has yet to secure conviction for criminal violation of insider trading, but the SEC was successful in securing convictions for other violations of the Securities Regulation Code such as the 2015 conviction of “pyramid scam queen” Rosario Baladjay who was sentenced to a total of 455 years for violation of the SRC.