TWO subsidiaries of the Standard Chartered Bank have been disciplined by the Securities and Futures Commission (SFC) over malpractices in share trading and listings.
Broking arm Standard Chartered Securities was found to have been involved in ''rat trading'' - generating profits from share price differentials at the expense of the firms' customers - and effectively lying to regulators.
Standard Chartered Securities agreed to suspend its involvement in new issues for nine months after the investigation revealed widespread misconduct in the flotation of six companies, which together raised more than $550 million.
The SFC found that Standard Chartered Asia, was aware, or should have been aware, of what was happening.
The nine-month probe was the SFC's most high-powered investigation in its five-year history.
It found that the brokerage had acted against the interests of thousands of small and institutional investors by making preferential loans to majority shareholders, or their nominees, which were used to purchase shares and sustain the price of the new listings.