Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) exposes the perpetrators of capital market crimes that harm society.
Deputy Head of Capital Market Supervision 1A OJK Luthfy Zain Fuady revealed that there are four institutions that often commit violations in the capital market with various modes. The four institutions are securities companies, investment managers, issuers and supporting professions / institutions.
The mode of violation committed by securities companies, such as pseudo trading which creates prices that are not entirely due to the demand for buying and selling securities in the market. This has led to stock price manipulation.
Many directors of securities companies were also involved even though fit and proper tests had been carried out before taking office. This has an impact on bad behavior and internal control of securities companies.
Other forms of crime that also often occur are transaction activities by employees that are carried out without permission and securities issuance arranger activities carried out without permission.
Furthermore, the violations were committed by the investment manager. The forms range from providing fixed return guarantees to mutual funds and marketing mutual funds without a license.
The investment manager, said Luthfy, also committed a violation in the form of the composition and valuation of securities used as a mutual fund portfolio. Others such as cross trading, affiliation and conflict of interest by investment managers.
“Earlier there was a promise of a fixed return every day of 1% or 7% in an illegal or fraudulent scheme, it turns out that this also happens in legal schemes, in this case mutual funds,” said Luthfy at the Capital Market Summit & Expo 2020 which was held virtually, Thursday (22/10/2020).
According to Luthfy, this practice is clearly against the rules. The reason is that the regulation states that investment managers cannot provide fixed returns because investment portfolios are moving in value so that profits are impossible for one time.
In addition, issuers also frequently violate capital market regulations. The mode does not provide disclosure in accordance with regulations such as the delivery of information disclosure and the company’s official website.
“We also found several misstatements of financial statements. Some were very material in nature. Maybe two years ago there was a quite large case, there was one bank which was then subject to a restatement in its financial report where the difference in profit was extraordinary because there was a mistake in it. presentation of financial statements, “he explained.
“This is very influential on investment decisions because the profit was high before then the restatement was much smaller than it should be. So people think he bought a good company but it turns out he bought a less good company.”
In addition, violations committed by supporting professions / institutions are usually in the form of failing to comply with OJK regulations and the applicable professional code of ethics. Apart from that, several times it was also found that there were contract signings when the license had been revoked or was frozen.
Luthfy said that the losses due to illegal investments, aka fraudulent investments in the last 10 years, reached Rp. 92 trillion. This amount is considered very large and does not include losses caused by investment by legal institutions.
According to Luthfy, this violation was carried out by many capital market industry players because of the empty space in the investment rules and authority between institutions so that certain individuals were used to make products that had no character in the investment law.
“So what we face is not only a ‘bad’ figure, but also someone who understands regulations and understands how to take advantage of these regulatory loopholes,” said Luthfy.
Investment violations are not only committed by illegal, unlicensed institutions, but also often by entities that have operational licenses and are regulated by regulators. As is the case with several cases that occurred in the capital market by related institutions.
“Even though investment in the capital market is categorized as legal, meaning that it is not fake, it is carried out by an entity that has a license and is supervised. But that does not mean that there is also a violation. the fake investment earlier, is even worse because he already has a permit, “he explained.
(hps / hps)
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