Several brokers on Wednesday filed complaints with the Economic Crime Suppression Division related to the investor who bought More Return Plc (MORE) shares late last week, but defaulted on the payment, causing damage estimated at more than 4 billion baht.
The Stock Exchange of Thailand (SET) froze the accounts of investors who bought MORE shares on Nov 10, which were scheduled for payment on Nov 14, because of the suspicious trades.
According to a statement by the SET, the bourse noticed unusual trading of MORE as the share price rose by up to 4.3% from the previous day and trading value tallied 7.13 billion baht, compared with an average of 360 million baht during the previous 30 days.
During early trade on Nov 10, there were buy orders for 1.5 billion shares worth nearly 4.3 billion baht.
What set off alarm bells is only one investor placed the buy orders through several brokers for a price of 2.90 baht per share, while several investors wanted to sell at that price.
The sell orders varied in terms of size, ranging from 70 million to 600 million shares per order.
After the SET opened for trade on Nov 10, the price of MORE shares slumped to 1.95 baht within 20 minutes and remained at that level until the market closed. The SET then issued a warning to its members, said SET president Pakorn Peetathawatchai.
The price of MORE shares continued to fall the following day to 1.37 baht apiece, with trading volume of only 134 million baht.
The SET then cooperated with its members, the Association of Securities Companies and related agencies to carry out an investigation regarding the suspicious transactions.
"Most brokers have already made the payment for MORE shares to the SET's clearing and settlement house. However, more than 10 sellers have been reported regarding suspicious trading, so the SET froze their accounts," Mr Pakorn said.
"If investors had their accounts frozen, but were not involved in the incident, they can provide proof related to their trading information to the SET. We will then present them as witnesses in the case."
He said the SET has gathered about 50% of the trading data that is classified as irregular or abnormal.
The SET is confident that by Nov 18, significant progress related to the investigation will be achieved, with more information provided from related agencies.
The bourse will then send that information to the Economic Crime Suppression Division, said Mr Pakorn.
Going forward, the SET has vowed to improve relevant regulations in order to avoid a repeat of the suspicious trades, he said.
A hearing will be arranged with all relevant agencies covering considerations regarding the value of securities placed as collateral, the valuation of stocks used as collateral, and the ratings of each stock, said Mr Pakorn.
Some stock trades will return to cash only and a credit bureau would be set up allowing brokers to determine whether a client has opened an account as well as the credit amount provided by brokers to the client, he said.
Investors who have any information regarding unusual trades of MORE securities can phone the SET call centre at 02-009-9999 to help with the collection and coordination of information delivered to investigators, Mr Pakorn said.
