Slap on the Wrist: 3 Brokers Suspended in Sri Lanka 🇱🇰 for Front‑Running & Securities Violations

⭕ The Securities and Exchange Commission (SEC) of Sri Lanka has suspended three stock brokers for serious breaches of market conduct, including front‑running and misuse of insider information.

⭕ Roshantha Fernando: Suspended for trading in Browns Investments, Royal Ceramics, and Richard Pieris shares using his wife’s account while having access to confidential SLIC (Sri Lanka Insurance Corporation) transaction data.

⭕ Jaliya Wijeratne: Suspended for conspiring to front‑run the Employees’ Provident Fund (EPF) by executing trades ahead of a known large EPF order in Piramal Glass Ceylon PLC.

⭕ Akila Milanka Induruwage: Suspended for conspiring to front‑run the EPF and assisting another to do the same, also involving Piramal Glass Ceylon PLC.

⭕ Front‑running is an illegal practice where a broker trades using knowledge of a large pending client order—placing personal trades first to benefit from the expected price movement.

⭕ All three individuals are disqualified from acting as Key Management Personnel or handling client transactions for three years, effective June 6, 2025, under Rule 25 and Schedule II 6.(g) of the SEC Rules for Stock Brokers.

⭕ Due to the actions of these brokers, EPF and SLIC were likely unable to buy shares at intended prices, as prices were artificially driven up before their orders could be executed. This directly harmed both public funds and employee beneficiaries, costing the state millions.

⭕ If these individuals had committed such offenses in a country like the United States 🇺🇸, they could have faced penalties of up to USD 5 million and 20 years in prison under U.S. securities laws.

#SriLanka #CSE