Key Points
- The unit will identify suspected Ponzi schemes and unlicensed financial activities.
- It will refer verified leads to regulators or law enforcement agencies.
- The initiative aims to detect potential fraud before investors suffer losses.
ISLAMABAD: Pakistan’s corporate regulator has established a unit to detect suspected investment fraud, illegal deposit-taking and unlicensed lending by companies before their activities cause further financial losses.
The Securities and Exchange Commission of Pakistan (SECP) said on Wednesday that its new Corporate Intelligence Unit would monitor news reports, social media and online advertisements.
The Unit would identify registered companies suspected of Ponzi or pyramid schemes, taking deposits or lending without the required licences, or businesses outside their approved objectives.
The Unit will verify potential violations and refer credible leads to relevant SECP departments for investigation or enforcement action.
Unit to share information with Pakistan investigation agencies
It would also share information with the Federal Investigation Agency (FIA), National Cyber Crime Investigation Agency (NCCIA), State Bank of Pakistan and National Accountability Bureau, depending on the nature of the suspected violations.
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SECP Chairman Dr Kabir said the unit would strengthen the regulator’s risk-based surveillance by converting publicly available information into verified leads.
Early detection could enable timely intervention, improve coordination among agencies and help protect investors before losses escalate.
The unit is being established under Section 20 of the SECP Act, 1997, as part of the chairman’s secretariat.
A director or additional director will head the unit, and at least two officers will serve as support staff.
The initiative is designed to help the regulator identify suspicious activity before receiving formal complaints.
By connecting information from multiple public sources and tracking recurring patterns, the unit will identify emerging risks and direct regulatory scrutiny towards potentially unlawful activities.
Ponzi schemes use money from new investors to pay earlier participants, creating the appearance of legitimate returns without a sustainable source of income.
Pyramid schemes typically depend on recruiting new participants, with earnings linked to further recruitment. Such schemes can collapse when the flow of new money slows, leaving investors facing losses.
The unit will also monitor companies suspected of accepting deposits or providing loans without the necessary authorisation.
Its effectiveness will depend on the timely verification of leads and follow-up action by the relevant authorities.
