Colombo Chief Magistrate Asanga S. Bodaragama has directed the Criminal Investigations Division (CID) to arrest and produce before court those responsible for spreading fake news on social media for the purpose of profiteering through trading shares on the Colombo Stock Exchange (CSE).
The Magistrate further ordered that a report on the perpetrators’ accounts be submitted to the Facebook Meta platform, following submissions made to the court by the CID.
This development follows revelations concerning Blue Ocean Securities Ltd, which has been identified as a fraudulent entity lacking the required licensing from the Securities and Exchange Commission (SEC) to conduct securities trading on behalf of investors. The company is accused of persuading customers to deposit funds into designated accounts—a scheme detected by the SEC through its state-of-the-art surveillance and supervision mechanisms.
SEC Chairman Professor Harendra Dissabandara told the Sunday Times Business on Thursday that, in order to protect investors in line with the regulator’s mandate, the SEC had alerted the Central Bank Governor, the Department of Immigration, the banks involved, the relevant telecommunication companies, the CID, and the Computer Crimes Investigation Division. The SEC has also instructed the CSE to continue further follow-up to safeguard investors and the general public.
Analysts have warned that swift action is needed by the relevant authorities to prevent the situation from escalating into a full-scale mega scam. They emphasized that this incident underscores the need for stronger regulatory oversight to protect investors from such fraudulent activities and to ensure financial institutions follow proper protocols when accepting new clients.
