Habib Metro Bank’s AVP found guilty in landmark insider trading case

KARACHI: In a landmark verdict, the Sindh Special Court (Offences in Banks) has handed down the first-ever insider trading conviction in Pakistan in a case instituted by the Securities and Exchange Commission of Pakistan (SECP).

The court declared Zakir Hussain Somji, Assistant Vice President, Investments in Habib Metropolitan Bank Limited (HMB), guilty of insider trading under Section 128 of the Securities Act, 2015, reported TechJuice.

SECP Chairman Akif Saeed welcomed the decision, saying that the ruling will further bolster investor confidence in Pakistan‘s capital markets and facilitate long-term capital formation. He hoped that the ruling would act as a precedent for outstanding cases and ongoing investigations related to insider trading in Pakistan.

The case arose from SECP‘s meticulous scrutiny of suspicious trades reported via the Karachi Automated Trading System (KATS) from January 1, 2014, to February 2, 2016. Investigations found that Somji had abused insider information about HMB‘s investment choices to gain personal benefits.

According to the details, the accused bought 11,795,100 shares of different companies, including 1,230,900 shares (10.43%) bought from HMB, and offloaded 11,836,600 shares, 4,915,200 (41.52%) of which were offloaded to HMB, making unlawful profits of Rs2,866,646.

SECP lodged a formal complaint under Section 128, which is punishable under Section 159 of the Securities Act, 2015. After conducting a full trial and hearings by SECP‘s Special Public Prosecutors and the defence, the court gave its verdict on June 14, 2025.

The accused was found guilty and sentenced to a fine of Rs8,599,938, three times the unlawful profit, with seven days for payment. The default will lead to imprisonment until the amount is recovered fully.

The landmark insider dealing conviction is almost six months after SECP discovered up to 37 registered companies that engaged in illicit money dealings in Pakistan.