Facebook Inc To Be Monitored By Philippines For Insider Trading

Facebook chat will be on the radar of securities regulators in the Philippines. They’re hunting down market manipulation and Ponzi schemes. Regulators will now track tweets and Facebook chat groups for any hint of price manipulation and are also actively pursuing various other instances without revealing if they are focusing on company insiders or brokers.

Facebook, Twitter used actively by traders

Jonathan Ravelas, chief market strategist at BDO Unibank in Manila, told Bloomberg that social networks such as Facebook and Twitter are abuzz with conversations about which stock to buy, and it comes as a surprise sometimes to see how these people get such information. Ravelas said stronger vigilance will spread the word that regulators are serious on checking price manipulation.

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Philippines regulators are busy gathering evidence to present a case against one company for Insider trading, says a report from Bloomberg. The information was revealed by Commissioner Ephyro Luis Amatong, but the name of the firm was kept secret.

Amatong said, “The pump-and-dump, insider trading, scams: we are told they’re happening online.” The executive added that regulators are actively following cases to look for any anti-market activities.

Facebook and Twitter are used actively in the Philippines, as the country is among one of the heaviest users of social media, claims a recent report from London-based consultancy We Are Social. In 2010, finance officials were using Facebook and Twitter to track tax cheating cases.

Philippines going the Chinese way

Over the past five years, the Philippines stock market has tripled in value to $278 billion, becoming a lucrative investment destination for foreign funds and retail investors. The benchmark equity index has spiked 140% in the last five years, but an increase in share prices does not always carry any disclosure of the information that led to the increase. There have been cases in which analysts got their hands on financial results before they were posted on the exchange’s website.

Similar to the Philippines, last month Chinese officials started tracking market manipulation activities by brokerage employees using non-public information in the wake of an equity price spike that weighed heavily on new investors who were at the risk of being jolted due to sudden price movements.

Both social networking sites Facebook and Twitter did not reply to emails from Bloomberg. Also it was not clear from the statement of Amatong as to which social network is on regulators’ radar.