Thailand's SEC picks up enforcement efforts
By Jon Fernquest
No
one loves to be audited.Serious looking accountants in grey suits comb through your financial records looking for a mistake or even worse: intentional malfeasance followed by an expensive court case, a fine, a jail sentence....
But audit they must if a company or organisation wishes to gain a reputation for being squeaky clean like the Bangkok Post (63rd birthday today!).
Today's article is about how Thailand's SEC has picked up its efforts to enforce securities market laws and regulations.
An auditor has been charged with fraud for the first time. Probably not the first time an auditor has actually committed fraud so this could mark real progress (Read about the case: 1.36 billion baht in luxury cars disappear along with company chairman, stock plunges 90%).
Today's article features lots of vocabulary useful for lawyers and aspiring lawyers:
X picks up -
activity X increases, grows more intense
audit - official examination of accounting records to check if they are correct and there are no irregularities (See Wikipedia)
auditor - an accountant who audits the accounting records of companies
irregularities - actions that do not follow the rules, perhaps dishonest
audited - to have your accounting records examined for accuracy
comb through - search everywhere, go over and check in detail
intentional - wanting to do something, not an accident (for example, the man and woman had the baby intentionally)
malfeasance - doing something wrong
reputation for Y - to be known for Y
squeaky clean - very very clean (no irregularities)
picked up its efforts to Y - increased or intensified activity trying to achieve goal Y
securities market - the markets in which securities (stocks, bonds, futures, derivatives) are bought and sold
fraud - tricking and deceiving to get money
progress - developing gradually from one stage to the next stage
aspiring lawyers - people who have the goal of becoming lawyers
audit - official examination of accounting records to check if they are correct and there are no irregularities (See Wikipedia)
auditor - an accountant who audits the accounting records of companies
irregularities - actions that do not follow the rules, perhaps dishonest
audited - to have your accounting records examined for accuracy
comb through - search everywhere, go over and check in detail
intentional - wanting to do something, not an accident (for example, the man and woman had the baby intentionally)
malfeasance - doing something wrong
reputation for Y - to be known for Y
squeaky clean - very very clean (no irregularities)
picked up its efforts to Y - increased or intensified activity trying to achieve goal Y
securities market - the markets in which securities (stocks, bonds, futures, derivatives) are bought and sold
fraud - tricking and deceiving to get money
progress - developing gradually from one stage to the next stage
aspiring lawyers - people who have the goal of becoming lawyers
Unlicensed brokers emerge as new threat
Share manipulation eases as market slowsNUNTAWUN POLKUAMDEE
30/07/2009
While cases of share manipulation fell in the first half in line with weak sentiment in the stock market, securities regulators say cases of unlicensed brokers or illegal futures traders have increased.
Prasong Vinaiphat, a deputy secretary-general of the Securities and Exchange Commission, said 96 cases had been forwarded by regulators to the Department of Special Investigation.
Most represent cases submitted to police investigators since 2007. In general, the investigation process, including interviews with witnesses and suspects, takes at least one year before the case can move to the court system.
Mr Prasong said share manipulation cases typically began by analysing data on trading patterns from the Stock Exchange of Thailand, then followed with an investigation and interviews of suspects, brokers and marketing officers.
If the SEC believes that prosecution is warranted, a criminal case is filed and the case is forwarded to the DSI.
If the DSI accepts the case, the SEC will second its staff to work with police investigators to gather evidence and vet documents needed for the case before filing charges with the court.
First fraud charge against auditor
In the first half of the year, the SEC submitted three cases to the DSI for criminal action, including charges against 12 involved in the Picnic Corp accounting and partiesfraud case. Regulators also filed charges against K-Tech Construction for failing to submit financial statements as required and a fraud charge against the auditor of S.E.C. Auto Sales and Services (SECC).The SECC case represents the first time criminal charges have been taken against an auditor. The SEC in June accused auditor Somchai Kurujitkosol of failing to comply with accounting standards in auditing SEC Auto Sales and Service from 2005 to 2007, and suspended his licence for two years.
Securities regulators last December filed a criminal complaint against Sompong Witthayaraksan, the chairman and founder of the SET-listed luxury car importer SECC, for fraud and embezzlement. Five parties were charged with colluding to defraud the company by falsifying documents.
Brokers without licenses
Regulators in the first half of the year also took legal action against five companies for operating illegal brokerages and selling futures contracts without a licence: Wanglee Global Market, Glory Prosperity, World Trading Prosperity, Double USD International and WSD Financial.Fines of 110.44 million baht were also imposed against 16 parties for various violations, including share manipulation and insider trading. Under the law, regulators may impose fines of up to double the benefits received from an illegal trade or action.
Meanwhile, Nataya Niyamanusorn, director of the SEC's corporate governance department, said the new "acting in concert" rule will become effective starting Aug 1.
Existing SEC regulations require disclosure of shareholding changes amounting to 5% of total outstanding shares of a company. A shareholder accumulating more than 25% must submit a tender offer for outstanding shares.
The "acting in concert" rule increases disclosure requirements for concerted parties, including the spouse or minor children of a shareholder. Violations of the rule are subject to fines of up to 500,000 baht and jail of up to 10 years.
(Source: Bangkok Post, business, Unlicensed brokers emerge as new threat, Share manipulation eases as market slows, NUNTAWUN POLKUAMDEE, 30/07/2009, link)
Vocabulary:
license - permission
to do a job or perform restricted activity
suspend X - stop X temporarily
suspended his licence - end or revoke the special permission that has been given to him to do some activity
broker, stock broker - a person who buys and sells stock shares for other people
unlicensed brokers - people who buy and sell stocks and bonds without having legal permission to do this
X emerges as Y - X are becoming Y
share manipulation - to control and influence the price of stocks illegally to make a profit
sentiment - how investors and financial experts feel about the economy, whether it will get better or worse in the near future
weak sentiment in the stock market - investors in the stock market do not feel that stock prices will rise very much in the future
securities regulators - the government organisations that make rules for stock trading
futures, futures contracts - contracts to buy something in the future, for examples commodities such as rice and oil, used to insure and protect against price movements (hedge) (See Wikipedia)
futures traders - people who trade futures contracts on organised exchanges (for a profit)
Securities and Exchange Commission (SEC) - a government organization that controls how securities (shares, bonds, futures) are traded in order to protect investors (creates and enforces regulations)
X forwarded to Y - to send or pass information, mail, or goods to another person
Department of Special Investigation (DSI) - a government agency "commissioned specifically for the surveillance, deterrence, and effective prevention of organized criminal activities that continue to jeopardize the country's economy, social order, national stability, as well as for the eradication of any illicit groups or activities that endanger international security" (Source: DSI Website)
investigation - try to find out what happened during an event, discover the truth
witnesses - a person who say an event, usually an accident or crime that they describe, an eyewitness
suspects - people that the police think might be guilty of a crime
analysing data on trading patterns - look at a person's trades to see if they were manipulating prices with trade
interviews - asking a person a series of questions to get information (for example: to decide whether to hire them (job interview) or to publish an article about them)
prosecution - formally charging someone with a crime and putting them on trial
X warranted - action X is appropriate or necessary in the situation
prosecution is warranted - a legal case should be brought against them in this situation
second X to do Y - after someone proposes that X do task Y (proposer) another person agrees to and supports proposal to make it actually happen
second its staff to work with... - support a proposal that its staff work with...
evidence of X - things that lead you believe that X is true or really happned
vet documents - check documents to see if acceptable (legal, correct, appropriate)
filing charges with the court, filed criminal charges - to start a legal case against someone
a criminal complaint - a written statement of the facts alleging that a crime has been committed by someone
filed a criminal complaint against, initiate complaints - officially submitted to the government for evaluation and possible prosecution
parties, parties involved in the case - the people or organisations in involved in a legal case or arrangement
concerted parties - people or organisations working together
fraud - tricking and deceiving to get money
auditor - a person who officially examines the accounting records of a company to ensure accuracy
S.E.C. Auto Sales and Services (SECC) - (See previous article)
comply - to obey and follow a rule or order
comply with accounting standards - to follow rules for accounting
embezzlement - to steal money that belongs to your employer, money that you are responsible for
collude - work together secretly to do something harmful or dishonest
defraud - to get money illegally by tricking
colluding to defraud - working together to get money illegally by tricking
falsifying documents - stating incorrect information on an official document (lieing, a crime)
fines imposed - when the court makes people pay fines as punishment for violating a law or regulation
insider trading - crime of buying and selling securities (stocks, bonds, derivative) with secret information not publicly available
benefits of Y - a helpful and useful thing that someone gets from Y
corporate governance - the high level management of a company by a company's board of directors (See Wikipedia)
acting in concert - acting together (coordinating actions)
disclosure - making facts known to the public
outstanding - not yet complete (not finished, not paid yet)
outstanding shares - stock shares that have been issued and are held by investors
submit a tender offer - offering to buy new stock shares at a certain price
suspend X - stop X temporarily
suspended his licence - end or revoke the special permission that has been given to him to do some activity
broker, stock broker - a person who buys and sells stock shares for other people
unlicensed brokers - people who buy and sell stocks and bonds without having legal permission to do this
X emerges as Y - X are becoming Y
share manipulation - to control and influence the price of stocks illegally to make a profit
sentiment - how investors and financial experts feel about the economy, whether it will get better or worse in the near future
weak sentiment in the stock market - investors in the stock market do not feel that stock prices will rise very much in the future
securities regulators - the government organisations that make rules for stock trading
futures, futures contracts - contracts to buy something in the future, for examples commodities such as rice and oil, used to insure and protect against price movements (hedge) (See Wikipedia)
futures traders - people who trade futures contracts on organised exchanges (for a profit)
Securities and Exchange Commission (SEC) - a government organization that controls how securities (shares, bonds, futures) are traded in order to protect investors (creates and enforces regulations)
X forwarded to Y - to send or pass information, mail, or goods to another person
Department of Special Investigation (DSI) - a government agency "commissioned specifically for the surveillance, deterrence, and effective prevention of organized criminal activities that continue to jeopardize the country's economy, social order, national stability, as well as for the eradication of any illicit groups or activities that endanger international security" (Source: DSI Website)
investigation - try to find out what happened during an event, discover the truth
witnesses - a person who say an event, usually an accident or crime that they describe, an eyewitness
suspects - people that the police think might be guilty of a crime
analysing data on trading patterns - look at a person's trades to see if they were manipulating prices with trade
interviews - asking a person a series of questions to get information (for example: to decide whether to hire them (job interview) or to publish an article about them)
prosecution - formally charging someone with a crime and putting them on trial
X warranted - action X is appropriate or necessary in the situation
prosecution is warranted - a legal case should be brought against them in this situation
second X to do Y - after someone proposes that X do task Y (proposer) another person agrees to and supports proposal to make it actually happen
second its staff to work with... - support a proposal that its staff work with...
evidence of X - things that lead you believe that X is true or really happned
vet documents - check documents to see if acceptable (legal, correct, appropriate)
filing charges with the court, filed criminal charges - to start a legal case against someone
a criminal complaint - a written statement of the facts alleging that a crime has been committed by someone
filed a criminal complaint against, initiate complaints - officially submitted to the government for evaluation and possible prosecution
parties, parties involved in the case - the people or organisations in involved in a legal case or arrangement
concerted parties - people or organisations working together
fraud - tricking and deceiving to get money
auditor - a person who officially examines the accounting records of a company to ensure accuracy
S.E.C. Auto Sales and Services (SECC) - (See previous article)
comply - to obey and follow a rule or order
comply with accounting standards - to follow rules for accounting
embezzlement - to steal money that belongs to your employer, money that you are responsible for
collude - work together secretly to do something harmful or dishonest
defraud - to get money illegally by tricking
colluding to defraud - working together to get money illegally by tricking
falsifying documents - stating incorrect information on an official document (lieing, a crime)
fines imposed - when the court makes people pay fines as punishment for violating a law or regulation
insider trading - crime of buying and selling securities (stocks, bonds, derivative) with secret information not publicly available
benefits of Y - a helpful and useful thing that someone gets from Y
corporate governance - the high level management of a company by a company's board of directors (See Wikipedia)
acting in concert - acting together (coordinating actions)
disclosure - making facts known to the public
outstanding - not yet complete (not finished, not paid yet)
outstanding shares - stock shares that have been issued and are held by investors
submit a tender offer - offering to buy new stock shares at a certain price
