Among the cases that have shaken public confidence in investments in the Stock Exchange of Thailand (SET) in recent years, More Return Plc (MORE)'s suspicious share trading would certainly top the list.
Trust in the Thai bourse's system of monitoring unusual transactions and sending warnings to investors has been one casualty of this event.
MAI-listed More Return opened at 2.90 baht apiece on Nov 10, up 4.3% from the previous session, as there were buy orders for 1.5 billion shares at such a price.
Several investors placed sell orders at the same price, representing a combined transaction value of 7.14 billion baht. However, the price quickly fell to a floor price of 1.95 baht.
The price of MORE shares continued to fall the next day, to 1.37 baht apiece. The SET then suspended trading of MORE shares from Nov 14-18, before resuming trade on Nov 21.
The SET, together with its members and related agencies, carried out an investigation regarding the suspicious transactions.
More than 10 brokers filed complaints with the Economic Crime Suppression Division against Apimuk Bumrongwong, MORE's fourth-largest shareholder, who reportedly placed buy orders for 1.5 billion MORE shares.
In a related case, the Securities and Exchange Commission (SEC) on Nov 17 announced the temporary suspension of the business operations of Asia Wealth Securities (AWS) for using 158 million baht of clients' money to purchase shares without their consent.
The money was reportedly used to purchase MORE shares.
Both cases have shaken investors' confidence, particularly in small-cap stocks, and prompted brokers to exercise more caution while trading.
The incidents have also raised questions about the securities industry and the role of regulators in preventing fraud.
To fix the loopholes, the SET and SEC have vowed to work together and better coordinate to improve the criteria for listing securities, requiring them to have a good track record of performance and profitability over several consecutive years.
A credit bureau concept could be applied to allow brokers to determine whether a client has opened an account, as well as the amount of credit provided by brokers to the client.
Analysts asked the SET to have an immediate warning system to identify irregular trading orders in a timely manner.
