ASSIGNMENT # 01

Example of Insider Trading in history of Pakistan:

Applicant: Hanif

Court: NAB court

Inquiry:

National Accountability Bureau (NAB)’s chairman took notice of complaint against insider
trading and arrested a director from Rawalpindi on late night Tuesday. He was later presented
before the accountability court on Feb 22. The court decided to give a 10 day (about 1 and a half
week) physical remand to the director. The office was also raided, located on the 2nd floor of
Stock Exchange Tower, and all relevant records were taken into custody.

Hassan Waheed Khan, Director AWJ securities Private Limited, according to NAB, was
accused of conducting fraudulent business and cheating the public with a huge amount of money.
He was involved in the corruption of Rs 260 million during selling and purchasing of stocks
(shares).

The complaint was filed by Security and Exchange Commission of Pakistan (SECP), which says
120 complaints have been filed against the accused with total liability of Rs 260 million and was
amount to his own use.

The brokerage house registered under SECP was complained of non-transfer/ non- delivery of
securities and non-payment of cash to the investors, involving a huge amount of public money.
The Chairman NAB Zafar Hijazi took serious notice of matter and ordered NAB Islamabad /
Rawalpindi and NAB Lahore to conduct inquiry under NAO-1999.

During the inquiry it was revealed that the CEO of AWJ Securities Private Limited, Abdul
Waheed Jan, was also involved in such fraudulent activities, accused of Rs 400 million scam.

According to NAB, records received by Central Depository Company (CDC), Pakistan Stock
Exchange (PSX) and Security and Exchange Commission of Pakistan (SECP) AWJ Securities
Private Limited use to provide fake financial statement to its users and unauthorized trading
debarring people of getting their money. They were also involved in taking overdraft limits from
different banks by pledging shares in their clients and used the finances for their personal use.
The bank record also shows a huge number of cash transactions both in deposits and withdrawals
which is against the permissible limit. Both accused persons in connivance with each other have
committed offence of cheating public at large.

Earlier, SECP and NAB created a joint task force to eradicate corruption cases. Force comprised
of senior level officers of both NAB and SECP. After detailed investigation and raid on AWJ
securities Private Limited, Chairman SECP conducted a meeting with Chaiman NAB and
requested him to take immediate steps against the default brokers. Rawalpindi NAB started
investigation against AWJ Director and Hassan Waheed Jan was arrested.