The United States Securities and Exchange Commission has only shared 'public information' about the US bank scam of insider trading, involving two bankers of Pakistani-origin, with the Securities and Exchange Commission of Pakistan (SECP).
SECP Chairman Razi-ur-Rehman Khan informed the National Assembly Standing Committee on Finance on Monday that the SECP has no contact with any Federal Bureau of Investigation (FBI) team. The Commission, however, is in touch with its US counterpart on the banking scam pertaining to leakage of sensitive information.
"The US SEC is very tight-lipped and it has only shared public information with the SECP. It has conveyed two names of Pakistani-origin banking officials, including Hafiz Naseem to the SECP, which were already made public. However, no other name has been conveyed to the SECP. The US regulator is not ready to disclose other information with its Pakistani counterpart", Raziur-Rehman added.
During a debate on the presence of FBI team in Pakistan, Securities Market Division Commissioner Rashid I Malik elaborated that it is a common practice of interacting with other regulators and this conversation between them should not be made a political issue.
As Pakistanis were involved in the case of insidious trading, the US SEC has shared public information with the SECP. If it (US SEC) requires any further information for conducting inquiry, the SECP is ready to assist the US SEC. However, the SECP did not receive any phone calls from US regulator.
The SECP commissioner also said the SECP has no contact with any FBI team. We are only talking about US SEC and it should not be When MNA Kashmala Tariq read a report of an English daily referring to the CBR chairman about presence of the FBI team in Pakistan, Minister of State on Finance Omer Ayub clarified that the said report has already been contradicted and rebuttal has been published in the same newspaper.
However, Kashmala insisted that the government should categorically accept or deny presence of FBI team in Pakistan and involvement of key stock market players in the US insidious trading scam.
Omer Ayub contacted both PM's Advisor on finance Dr Salman Shah as well as the CBR chairman on telephone during committee's proceedings. He clarified that there is no official contact between the FBI team and Dr Salman Shah or CBR chairman.
Kashmala Tariq claimed that the case of insidious trading has a link with the stock market crisis, as wife of one of the involved bankers is working with a leading stock broker of Karachi. If FBI gives a report on linkage of insidious trading with the stock market crisis, then we have to review the investigation of stock market-crash.
There is a possibility that the insidious trading case of bank may be linked with the money laundering issue, she added. Some of the committee members insisted that the FBI team is presently investigating involvement of Pakistani brokers in the scam. However, government officials, including Omer Ayub and SECP officials categorically dispelled this impression, saying it is wrongly reported in the press that FBI team is in Pakistan.
It was reported that a 37-year-old Pakistani banker based in New York named Hafiz Naseem was charged for running an insidious trading linked to acquisitions involving nine publicly traded US companies, which netted millions of dollars.
He used to pass on information to another Pakistani, who executed trading before the deals were announced. He was arrested in New York and charged with 26 counts of conspiracy and securities fraud. He is accused of leaking details about nine deals, including the largest-ever $32 billion leveraged buyout of TXU.