Sri Lanka’s stock market regulator has issued a stern warning to so-called “naughty boys,” urging them not to repeat market manipulation tactics from over a decade ago, emphasizing that it is monitoring activities closely.
The Securities and Exchange Commission (SEC) encouraged market participants to focus on sustainable and responsible investment and trading practices, reaffirming its commitment to maintaining market confidence.
“In the past few weeks, we have observed certain ‘naughty boys,’ reminiscent of behavior seen 10 to 12 years ago, beginning to act similarly. We have had serious discussions with them,” Prof. Hareendra Dissabandara, chairman of the SEC, said while addressing the commission’s 38th anniversary celebrations in Colombo on Thursday. He added that proper systems have been established and procedures streamlined to ensure the market functions in an orderly manner.
Prof. Dissabandara was referring to the period between 2012 and 2015, when powerful and influential individuals—including high-net-worth investors, stockbrokers, and occasionally politicians—engaged in stock market manipulation and insider trading within the Colombo Stock Exchange. During that time, practices such as pump-and-dump schemes and circular trading were reportedly used to artificially inflate share prices, which were then sold for profit, often at the expense of small retail investors.
