SSC to strengthen handling of stock manipulation

Pham Hong Son, SSC vice-chairman, said one to two cases of manipulation and insider trading would be prosecuted after the Tet (Lunar New Year) holiday. (Photo: ndh.vn)

The statement was made by SSC Vice Chairman Pham Hong Son at a brief meeting held earlier this week in Hanoi.

“One to two cases of manipulation and insider trading will be prosecuted after the Tet (Lunar New Year) holiday,” Son said.

“These practices cause damage to the market and listed companies and should be strictly punished.”

“The move is a deterrent to preventing the increasing number of violations of market regulations in the stock market,” Son said.

He added that the SSC could only deliver administrative sanctions so it had to cooperate closely with the Ministry of Public Security to handle cases that must face criminal charges.

“In the future, we will coordinate more closely to rigorously handle violations so that the market operates with transparency and efficiency," Son said.

When handling the cases, the SSC will also consider the responsibility of brokers and securities companies regarding their relationships with inpiduals and organisations that adopt price manipulation practices.

Any record that shows signs of a criminal offense would be immediately transferred to the police, Son said.

Last year, the SSC imposed administrative sanctions on 397 cases of manipulation with fines totalling 21 billion VND. Nine inpiduals were detected as having manipulated stock prices, creating false supply and demand.

Regarding criminal cases, the Hanoi People’s Court in October last year opened the first-ever trial in the case of 15 people who were charged with the falsification of stock trading documents, stock price manipulation and fraudulent asset transfers.

The accused included 35-year-old Tran Huu Tiep – former management board chairman of the Central Mining and Mineral Import Export JSC (MTM), 53-year-old Nguyen Van Dinh – former director of the mining firm Nari Hamico, and former officials of the Bank for Investment and Development of Vietnam (BIDV) and Tien Phong Bank (TPBank).

The defendants were reported to have falsified trading documents of MTM shares on the Unlisted Public Company Market (UPCoM), manipulated MTM share prices and fraudulently transferred MTM stocks on the market.

This is one of three criminal cases that were discovered and prosecuted.

The unification of the two existing bourses, approved by the Prime Minister recently, to establish the Vietnam Stock Exchange would help ease disadvantages of the current separate operating models, said Ta Thanh Binh, head of the market development department at SSC at the meeting.

Under the merger, the Hanoi-based Vietnam Stock Exchange would operate as a parent company for the Hanoi Stock Exchange and Ho Chi Minh Stock Exchange.

The exchange would be in charge of developing operational plans and strategies, issuing regulations about stock listings and trading, and supervising the operation of the two subsidiary exchanges.

The current separate trading systems of the two exchanges were independent and different, causing waste in social resources and costs for investors.

In addition, many departments of the two bourses, such as the research and development department, administrative department and international co-operation department, were doing the same tasks, leading to overlaps, Binh said.

According to Binh, the current trend of the world market is unification and merger of bourses into one, to increase market size and international competitiveness and reduce costs for investors.

The merger of the two stock exchanges will create maximum conditions for in-depth development.