Thai CEO challenges regulator's first executive penalty since insider trading scandal

September 14, 2016 6:16 AM EDT

A sign for the Securities and Exchange Commission (SEC) is pictured in the foyer of the Fort Worth Regional Office in Fort Worth, Texas June 28, 2012. REUTERS/Mike Stone


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BANGKOK (Reuters) - A brokerage CEO has become the first ever executive to challenge a penalty imposed by Thailand's stock market regulator, in the first disciplinary case involving an executive since an insider trading scandal prompted calls for stricter market oversight.

Apple Wealth Securities Chief Executive Prasit Srisuwan denied wrongdoing after the Securities and Exchange Commission (SEC) said it had banned him from working at any securities firm for two years due to lax client supervision.

The case comes after investors criticized what they perceived as light sanctions on executives that the regulator fined in December for insider trading. That led to calls for a crackdown on financial crimes and harsher penalties to improve corporate governance and restore investor confidence.

In a statement late on Tuesday, the regulator said Prasit failed to adequately supervise know-your-customer and customer due diligence (KYC/CDD) policies, undermining a system aimed at reducing market risk for customers of financial institutions.

It said the executive approved accounts and raised credit lines for customers that lacked necessary documentation, and that his brokerage could be deemed an accomplice should such clients break the law.

At a news conference on Wednesday, the executive said he strictly complied with all rules and regulations and that he would file a petition against the regulator.

"After more than 15 years working in the securities business, I have never done anything that causes damage to customers," Prasit said. "I'm ready to fight in court if needed."

He also said, without elaborating, that Apple Wealth would continue with a plan to list shares on the Thai stock exchange.

Thailand's benchmark share index <.SETI> has risen 12.6 percent so far this year, making it the second-best performer in Southeast Asia.

(Reporting by Khettiya Jittapong; Editing by Christopher Cushing)



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