The Securities and Exchange Commission (SEC) by virtue of the powers vested in it under the provisions of the Securities and Exchange Commission of Sri Lanka Act, No. 36 of 1987 as amended, conducted an investigation into certain trades executed by Mr. Neluketiyage Merril Tony Perera in order to ascertain whether said trades amounted to Market/Price Manipulation and Creation of a False Market as per Rules 12 and 13 contained in the Gazette bearing No. 1215/2 dated 18 th December 2001 which Rules were formulated by the SEC under Section 53 of the aforesaid Act.

Since the evidence elicited during the course of the above investigation suggested that through the execution of the above trades, Mr. Neluketiyage Merril Tony Perera had committed the offences of Market Manipulation and Creation of a False Market, Notice of Action was issued to him on 5 th January 2005.

Consequent to the Notice of Action being issued to Mr. N. M. T. Perera on charges of Market Manipulation and Creation of a False Market, the SEC received a written communication from him wherein he requested the SEC to compound the offences whilst stating that the trades in question had been carried out by him without any intention whatsoever of manipulating the market/price with respect to any share or creating a false market.

The Commission at its 200 th Meeting held on 15 th February 2005, having considered the circumstances in which the offences had been committed, decided to compound the said offences in terms of Section 51A of the SEC Act for a sum of Rupees Fifty Thousand.

The aforesaid sum of Rupees Fifty Thousand was paid by Mr. N. M. T. Perera on 25 th February 2005 and was credited to the Compensation Fund established under the SEC Act. Accordingly, the matter was compounded by the SEC.

In terms of the SEC Act compounding does not entail a finding of guilt.

Mrs. L. S. A. Seresinhe
Officer-in-Charge
SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA

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