BSEC flags manipulation in Al-Madina Pharma shares, orders DSE to probe two brokerages

The market watchdog has directed the Dhaka Stock Exchange (DSE) to launch a probe into highly unusual trading behaviours and price movements observed in the shares of Al-Madina Pharmaceuticals Limited.

According to an official order issued on June 15, the Bangladesh Securities and Exchange Commission (BSEC) flagged abnormal price fluctuations on the SME board of the premier bourse. The commission, suspecting systemic market manipulation, mandated the DSE to complete and submit its final report within 30 working days.

The probe is intended to unearth the operations of manipulative syndicates on the newly structured SME platform. It is expected to identify coordinated, non-genuine or manipulative trading practices by specific groups of investors targeting Al-Madina Pharmaceuticals' shares over recent weeks.

Market insiders noted that the stock has seen massive volume spikes accompanied by price volatility, raising red flags within BSEC's central automated surveillance system.

Crucially, the regulatory directive places two prominent market institutions under the scanner. The BSEC has tasked the DSE investigation team to thoroughly analyse the roles and responsibilities of the stockbrokers and dealers concerned, particularly naming UCB Stock Brokerage Limited and United Financial Trading Co. Ltd.

Investigators will check if these institutions facilitated, or failed to prevent, illicit trade execution through their respective Authorised Representatives (ARs).

Furthermore, the investigation will look for possible breaches of insider trading regulations, tracking whether any leak of unpublished price-sensitive information (UPSI) catalysed the irregular accumulation or disposal of the pharmaceutical company's stock.

Alongside structural trading inquiries, the DSE has been asked to enforce a strong compliance awareness initiative targeting Authorised Representatives, Compliance Officers and Chief Executive Officers of the respective stockbrokerages. The regulator warned that failures in executing trade compliance may violate statutory obligations under the Securities and Exchange Commission (Stock-Dealer, Stock-Broker and Authorised Representative) Rules, 2000.

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