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Islamabad, August 8, 2025 — The Securities and Exchange Commission of Pakistan (SECP) has initiated criminal proceedings in a high-profile insider trading case, filing a formal complaint against a Company Secretary of a listed company, along with four of his relatives and a private firm. The alleged misconduct resulted in unlawful profits totaling Rs. 338.085 million.
The case has been admitted by the Special Court (Offenses in Banks) in Sindh, marking a significant step in SECP’s effort to enforce transparency, deter market abuse, and restore investor confidence in the country’s financial markets.
Illicit Profits Made Through Buy-Back and Delisting Leak
According to an SECP spokesperson, the accused allegedly used non-public, material information related to the company’s upcoming share buy-back and delisting to accumulate shares between August and October 2023.
The Company Secretary, a key insider with privileged access, is accused of sharing this confidential information with his relatives and even funding their trading activities. The coordinated purchase of shares was followed by timely sales once the information was publicly announced, allowing the accused to earn massive illicit profits.
“The total illegal gain stands at Rs. 338.085 million,” the SECP said, confirming that this was a textbook case of insider trading, as defined under the Securities Act, 2015.
Special Court Admits Criminal Complaint
The Special Court for Offenses in Banks, which handles financial crimes and market misconduct, has formally admitted SECP’s criminal complaint, initiating legal proceedings against the accused.
This development is notable because criminal prosecutions for insider trading in Pakistan have historically been rare, with most cases ending in administrative penalties or settlements.
Legal experts say that the case could set a precedent for how white-collar financial crime is dealt with in the country moving forward.
What the Law Says: Penalties Under the Securities Act, 2015
The SECP has emphasized that insider trading is a serious offense under the Securities Act, 2015, which prohibits any person with non-public, price-sensitive information from trading or disclosing such information to others for personal gain.
Under the law, violators face harsh penalties, including:
- Up to three years of imprisonment
- A fine of Rs. 200 million
- Or a penalty equal to three times the unlawful gains made, whichever is higher
By bringing criminal charges, the SECP has signaled its intent to fully utilize the enforcement tools available under the law.
SECP’s Statement: Zero Tolerance for Market Manipulation
In its public statement, the SECP reaffirmed its commitment to protecting the integrity of capital markets and punishing financial wrongdoing without fear or favor.
“This action demonstrates the Commission’s zero-tolerance policy toward insider trading and its dedication to ensuring a level playing field for all market participants,” the statement read.
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The regulator also encouraged whistleblowers and market professionals to report suspicious activity and assured them of confidential handling and legal protection under existing frameworks.
Impact on the Market and Regulatory Outlook
Analysts believe the SECP’s bold move may act as a deterrent for future insider trading attempts and could lead to increased institutional trust in the Pakistan Stock Exchange (PSX). Market participants and investors have often expressed concern about asymmetry of information, where insiders benefit at the expense of retail investors.
“This kind of enforcement boosts confidence in the market and demonstrates that the SECP is evolving into a proactive regulator,” said a senior economist based in Karachi.
In recent years, the SECP has enhanced its Market Surveillance and Intelligence capabilities, using trade data analytics, financial transaction tracking, and digital evidence gathering to pursue complex white-collar crimes more effectively.
Ongoing Investigations and Broader Crackdown Expected
While the SECP has not publicly named the company involved or the individuals charged, sources suggest that the regulator is also scrutinizing other cases of suspicious trading activity reported over the past year. Officials hinted at more investigations underway, including possible collusion between insiders and brokerage houses.
“This case might just be the beginning,” a person close to the matter said, hinting that the SECP is now willing to pursue criminal accountability, not just administrative action.
