KPK warns capital market players about risks of corporate crime

Jakarta (ANTARA) - The Corruption Eradication Commission (KPK) has warned participants in the capital market industry about the high risks of corporate crimes lurking in this strategic sector, often involving securities companies or individuals within them. KPK issued this reminder after examining various methods of fraud or deception up to corruption in the capital market sector. For example, market manipulation to the misuse of client fund accounts that harms retail investors or damages the credibility of the national economy. “In cases of misuse of funds or client securities, there are practices of using client fund accounts without permission, even selling client shares without valid instructions,” said KPK Director of Community Participation Development, Kunto Ariawan, in a statement confirmed in Jakarta on Saturday. Kunto explained that for market manipulation methods, practices can include excessive transactions for commissions (churning) to engineering closing prices (marking the close). In addition, Kunto clarified, market manipulation can occur through fictitious transactions and the spread of false rumours, such as promising guaranteed profits on risky stock instruments or concealing material facts of issuers. These methods have the potential to harm retail investors and damage public confidence in the capital market. Not only that, Kunto said there is a method of transactions outside the official system (off-market dealings), namely clients are asked to transfer funds to personal accounts of certain individuals with promises of high returns or exclusive access to fictitious shares.