Friday, July 1, 2022

Pakistan Stock Exchange rebuttal to the article by Richard Morin published in various media platforms


Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]

Pakistan Stock Exchange (PSX) strongly repudiates the assertions made in the article by Richard Morin published in various media platforms. This is a ruthless attempt to malign PSX and SECP (the Apex Regulator). PSX being a National Exchange enjoys a high degree of credibility as a front-line regulator.

The article is a collection of frivolous allegations and fabrications which are far from reality. Whereas the fact remains that Richard Morin disclosed his positions of Founder, CEO and CCO of Archer Wealth Management (AWM) on a form submitted before his appointment, with a footnote mentioning that “Appointment of Successor is in process.”

As per his employment contract the MD-PSX was not allowed to be directly or indirectly involved, engaged or interested in any capacity (including but not limited to as employee, officer, director, shareholder, trustee or agent) in any other business other than the business of PSX. On joining PSX Richard Morin also submitted the Employee’s data form in which he clearly “disclosed” his complete disassociation as Founder, CEO and CCO of AWM.

Based on the findings of the explanation process, it was evident that Mr. Richard Morin made a false declaration of leaving AWM and has himself accepted his association in writing as Shareholder, CCO and also portfolio manager which was never disclosed earlier. Richard Morin continued to manage the affairs of AWM and even signed the Anti Money Laundering and other Compliance Reports of AWM even till his last day at PSX.

This was not only a conflict of interest but also endangered the reputation of PSX and its interests by making the AWM and PSX Associated companies. PSX reserves the right to report this major violation to the relevant international authorities.

The enquiry conducted by the Board of PSX revealed that some obvious and blatant violations were committed by Richard Morin, which includes false declaration on Employee’s Form, concealment of material facts, conflict of interest [sharing of time and resources simultaneously for his own company, while being employed by PSX], failure to comply regulations, compromised on applicable fit & proper criteria, violation of Articles of Association of PSX, failure to meet contractual obligations, etc.

Upon being confronted with the findings of the wrongdoings committed by him, he preferred to step down on his own and tendered his resignation instead of facing the investigation, which was unanimously accepted by the Board allowing him to take a graceful exit. However, it is disappointing that after leaving the Exchange and the country, he has chosen to make false and incorrect statements.

Aside from the above-mentioned facts, which led to his disassociation with PSX, it is also pertinent to mention here that he had not achieved his outlined objectives and commitments as per the Business plan approved by the Board during his tenure of 16 months. Not a single new product was introduced during this period.

Morin’s allegations of a nexus between legacy brokers in order to derail the reform process of the Stock Exchange is entirely concocted. Brokers are the back bone of the Stock Exchange as they participate in the market activities and are the major clients and stakeholders of PSX.

The affairs of the Board of PSX are however run purely by the directors/representatives of local and Chinese shareholders and the independent directors. Further, the Chairman of the Board has been appointed from amongst the independent directors unanimously by the Board.

The front-line regulatory function of PSX is fully segregated from the commercial function of PSX and directly reports to the Regulatory Affairs Committee comprising of only independent directors of PSX, and to SECP as its extended regulatory arm having common goals and objectives to ensure maximum protection of rights and interests of investing public, without any discrimination on size or type of investment.

Furthermore, Morin’s contention that the Trading System at the Stock Exchange is “leaky” does not match with the facts. PSX has a robust trading system providing automated trading solutions, fully integrated with the National Clearing Settlement System and Central Depository System ensuring all end-to-end information security aspects.

This system is up-to-date and fully compliant with the risk management features with a capacity to allow efficient execution of trades at par with international standards.

His accusations have come at a point when he has been given a graceful exit, whereby PSX concluded the matter with a positive gesture to protect the interest of all concerned, particularly the Exchange at large.

It is assured to all investors and public at large that PSX (a publicly traded company) is cognizant of its powers, roles and responsibilities under the applicable regulatory framework, and it is a demutualized Securities Exchange in letter and spirit which operates purely on principles of fairness, transparency and efficiency.

Read also: Resignation of disgraced Morin accepted, real gamers are still at large

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