Habib Metropolitan Bank Employee Convicted in Insider Trading

Staff Report

KARACHI: In a key decision, the Sindh Special Court (Offences in Banks) has convicted an individual for insider trading which has marked a major milestone in Pakistan’s legal and financial landscape.

The Securities and Exchange Commission of Pakistan (SECP) had filed a case against Zakir Hussain Somji, who served as Assistant Vice President – Investments at Habib Metropolitan Bank Limited (HMB).

The court found that Somji had violated Section 128 of the Securities Act, 2015. He had also exploited confidential investment information for personal gains.

Akif Saeed, Chairman of SECP, has welcomed the ruling and appreciated the legal team’s efforts. He has also observed that such enforcement would help restore trust in the capital market. It will also play a role in improving investor confidence and capital development. He further added that the decision would result in providing direction for other unresolved cases involving similar misconduct.

The investigation was initiated by suspicious trading patterns detected while analyzing a data from the Karachi Automated Trading System (KATS). It covered the period from January 1, 2014, to February 2, 2016. The SECP’s review had founded that Somji used privileged information relating to the bank’s investment decisions for personal share trading.

The probe also revealed that Somji had purchased around 11.8 million shares across multiple companies. They also included over 1.2 million shares sourced from HMB itself. Later, he sold around 11.8 million shares, amounting to roughly 4.9 million that were sold back to HMB. The trades had earned him a profit of around Rs. 2.87 million, gained unlawfully.

Following the findings, SECP had filed a formal complaint under the relevant sections of the Securities Act. After a full trial, the Special Court has delivered its judgment on June 14, 2025 and convicted Somji of insider trading.

The court has also ordered Somji to pay a fine of Rs. 8.6 million, triple the amount he unlawfully had gained during inside trading. The court also directed to deposit the amount within seven days. Failure to comply to the decision would result in his incarceration until full payment is made.

This decision has reinforced SECP’s role in enforcing transparency and fairness in the financial markets. It has also sent a strong message that misuse of insider knowledge and other market abuses would not be tolerated under Pakistan’s legal framework. SECP launches Companies Regularization Scheme