While Low Thiam Hock - better known as Repco Low - prepares his defence after his acquittal over stock market manipulation was overturned by the Court of Appeal yesterday, brokers say market rigging still occurs to this day.
However, they said, regulations introduced since the go-go years of the Kuala Lumpur Stock Exchange has seen rigging largely limited to penny stocks instead.
According to Inter-Pacific Securities head of research Pong Teng Siew, this is because such shares may escape market surveillance.
"Any out of order price movement in the stock market attracts attention, compared to those days. But when it involves small blocks of shares, or the undertaking is not so blatant, the (regulators) may let it go," he said.
A trader attached with a prominent broking firm who declined to be named said that penny stocks are an attractive option for ‘stock market operators’ because of the low entry price.
"It is easy to attract investors. If the stock starts at 10 sen and is pushed up to 50 sen, that’s already a 500 percent gain," he said.
He said that manipulation is often suspected when stocks with "funny names are seen trading at top volume".
"But you won’t see stocks go up from RM1 to RM100 and down to RM10 within a month anymore," he said.
Among others, he said, the introduction of the Securities Commission in 1994 and the switch from manual "paper trade" to the electronic central depository system limits space for fraud.
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