Get tough on stock market misconduct

“Justice delayed is justice denied.” This turn of phrase perfectly captures the current state of Thailand's capital markets, where cases of stock manipulation and insider trading have repeatedly eroded investor confidence.

- Tippatrai Saelawong

Despite the enormous financial damage caused by these scandals, enforcement remains frustratingly slow. It often takes years for cases to be resolved, creating the perception that financial misconduct is a low-risk, high-reward activity where wrongdoers can enjoy their illicit gains long before they ever face the consequences, if they do at all.

This raises the question of whether Thailand's capital markets regulatory system is strong enough to deter market abuse.

The TDRI analysed publicly available data on stock market misconduct cases handled by the Securities and Exchange Commission of Thailand (SEC) from 2018 to 2024. Of the 46 cases of unfair securities trading, 40 involved stock price manipulation or insider trading, with most offences occurring between 2017 and 2019. Such findings highlight the ingrained and systemic nature of violations. The other six cases involved false information disclosure and front-running transactions.

Instead of pursuing criminal prosecutions, which require extensive evidence and lengthy legal proceedings, the SEC has increasingly relied on civil penalties as a faster means of enforcement.

Before civil penalties were introduced in 2016 as part of the SEC’s securities law reforms, criminal prosecution convicted offenders in about 5% of stock market misconduct cases. The introduction of civil penalties significantly improved the ability to enforce financial regulations and bring wrongdoers to justice.