Wed, Jul 23, 2008 - Page 12 News List

FSC orders probe into alleged illegal stock trading

IRREGULARITIESThe regulator asked prosecutors to investigate allegations of insider trading and share price manipulation after some firms complained of media bias

By Joyce Huang  /  STAFF REPORTER

The Financial Supervisory Commission said yesterday it had recently discovered trading irregularities, but assured investors that the financial regulator had taken legal action to check the abnormal transactions.

“We have detected insider trading and manipulation of share prices and reported the irregularities to prosecutors,” Lee Chi-hsien (李啟賢), deputy director-general of the commission’s securities and futures bureau, told a media briefing.

The commission said it had ordered the Taiwan Stock Exchange and the over-the-counter GRETAI Securities Market to strengthen their stock surveillance system.

The regulator’s comments came after several listed companies, including Tatung Co (大同) and Jenn Feng Industrial Co (正峰工業), ran advertisements in local newspapers in the past two days claiming that biased media reporting had caused the recent plunge in their share prices.

The listed firms said in the ad that they remained financially sound and asked the financial and stock exchange regulators to increase their monitoring of market irregularities.

The commission said it would step up monitoring of the fast increase in short positions and might ask brokerages to track and explain “abnormal stock” movements.

Lee refused to give more details, such as names of the listed company targeted. He said only that his bureau would continue to keep a close eye on individual or institutional investors who attempt to manipulate share prices for illegal gains.

Expressing his continuing confidence in the local stock market, Lee said bureau statistics showed that the 698 companies listed on the main bourse saw 12.98 percent year-on-year growth in first-half revenues to NT$8.31 trillion (US$273.5 billion).

Utilities companies saw the biggest year-on-year revenue growth of 64.3 percent in the first half, followed by plastic and chemical companies, Lee said.

“The fundamentals of domestic listed companies are sound,” Lee said.

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