The Black Gold Investigation Center yesterday said "too many coincidences" led them to suspect the existence of insider trading cost the National Stabilization Fund (
A confidential source from the center said the Ministry of Justice Investigation Bureau's (MJIB) Taipei office is set to interview people who they believe may have knowledge of insider trading.
But the source acknowledged the difficulty of bringing a successful prosecution in the case, given the difficulty of obtaining sufficient concrete evidence of the crime.
Last Thursday the TAIEX plummeted by 282 points, with several shares going limit-down at the opening. The drop in the stock market on the futures market's November contracts settlement day came when the National Stabilization Fund confounded market predictions that it would intervene in the stock market to raise the TAIEX in order to ensure its profits in the futures market.
The development surprised the markets and raised suspicions that secret information regarding the investment strategy of the fund had been leaked to certain institutional investors and allowed these investors to carry out irregular dumping of certain stocks.
Some Chinese-language media on Sunday hinted that certain members of the fund's management committee or officials in charge of the operation of the fund might have been responsible for a leak, driving Minister of Finance Yen Ching-chang (
Some legislators and media, however, suggested that the irregular share dumping might not have to do with an information leak but may have been caused by what they called "technical defects" in the operation of the fund. They said such defects might have made the fund's transactions too predictable.
The MOF's Securities and Futures Commission (SFC) yesterday filed related materials with the Black Gold Investigation Center for the investigation.
After examining the materials, the source said yesterday that they believed they were dealing with insider trading, "although, apart from the phenomenon of the irregular trading, there is no other concrete evidence available to us as yet. What happened on that day was too unusual and rare so that only insider trading could offer a reasonable explanation," the source, an expert in the investigation of financial crimes, told the Taipei Times.
After the fall of stock prices at the opening on the day, the market was filled with rumors that the authorization for the National Stabilization Fund to intervene in the market had expired -- a rumor that will never be officially confirmed or denied, as the operations of the fund are kept secret.
RSS