September 14, 2011 / 2:10 PM / 8 years ago

Sri Lanka regulator acts on stock market manipulation

COLOMBO, Sept 14 (Reuters) - Sri Lanka’s Securities and Exchange Commission on Wednesday said that it would take unspecified action against a broker that engaged share price manipulation, and warned seven others, after “unusual price escalation” in four shares last year.

The Securities and Exchange Commission of Sri Lanka (SEC) in a press release said investigations showed five brokers from three firms and two investors had engaged in trades “that could possibly be construed as trades of a manipulative nature.”

Additionally, the SEC said it had issued notice that it will take action against another trader.

The SEC did not identify the individuals and firms involved.

The shares involved were Touchwood Investments PLC , Blue Diamonds Jewellery Worldwide PLC , Dankotuwa Porcelain PLC and the warrants of Environmental Resources Investments PLC , the SEC said.

The trades took place from July 1, 2010, to Aug. 3, 2010.

The maximum punishment for manipulation is up to a year in prison, a three-year suspension from trading and a fine of up to 10 million Sri Lanka rupees. (Reporting by Ranga Sirilal; Editing by Bryson Hull)

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