Where there is smoke there is fire: front running at MAC and DICE securities Pakistan
| Pages | 493-504 |
| DOI | https://doi.org/10.1108/JFC-07-2019-0095 |
| Date | 28 January 2020 |
| Published date | 28 January 2020 |
| Author | Tooba Akram,Saadia Irfan |
| Subject Matter | Financial crime,Accounting & Finance |
Where there is smoke there is fire:
front running at MAC and DICE
securities Pakistan
Tooba Akram
Azman Hashim International Business School, Universiti Teknologi Malaysia,
Johor Bahru, Malaysia, and
Saadia Irfan
NUST Business School, National University of Sciences and Technology,
Islamabad, Pakistan
Abstract
Purpose –This case captures the experienceof the newly hired investigation officer (IO) at the SECP, who
crafts a front running case focused on the ethicaltransgressions by equity trader and KATS operator, at a
famous brokerage housenamed Mir Ali Chaudhary Securities (MAC) Securities and threetraders at DICE in
Pakistan. The caseoutlines the whole series of investigation event that tookplace, from the IO identifying the
smoke to all the pieces of puzzletogether to form collectively evidence of front running.The case outlines and
probes students to think at each stage of investigation as to how to answer the general claims that insider
trading should be legalized. All these questions are viewed from the perspective of Pakistan’s regulatory
environment.
Design/methodology/approach –The authorsuse a descriptive case study methodology approach.
Findings –The investigation trial held Sidney and Aslam guilty, sentencing them to imprisonment and
making them pay fine to the Securities ExchangeCommission of Pakistan (SECP) worth Rs 5m and Rs 1m,
respectively.Likewise, the three equity traders at DICE were sentenced to imprisonmentand charged a fine of
Rs. 1m each.
Originality/value –On March 21, 2018,Mr Sidney, the equitytrader, Mr Aslam, a KATS operator at MAC
Securities and three equity traders at DICE Securities (Pvt.) Ltd were convicted under Securities Act (2015)
and Court of law. Sidney and Aslam were alleged of tipping off advance confidential information of their
clients’order to the three equitytraders at DICE, whereas the three traders at DICE were alleged of trading
shares basedon the tipped information in their trading account before the MAC clients’orderswere filled.
Keywords Pakistan Stock Exchange, Front running
Paper type Case study
Ms Tooba Akram and Dr Saadia Irfan prepared this case solelyfor class discussion and not
as an endorsement or a source of primary data. Thiscase, although based on real events, is
fictionized and any resemblanceto actual person or entities is purely coincidental.
Introduction
The Pakistan Stock Exchange (PSX) has been classified as an emerging market as of May
2017 by the Morgan Stanley Capital International and secondary emerging market by the
Morgan Stanley Capital International. With over 260 registered brokers[1] the exchange
provided a platform for trading shares, bonds futures (cash settled and commodities) and
term finance certificates. Insider trading is a common fraudulent activity in financial
markets all over the world. Like other parts of the world, to introduce the best international
Front running
at MAC
493
Journalof Financial Crime
Vol.27 No. 2, 2020
pp. 493-504
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2019-0095
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