Capital market watchdog summons brokers on rumors

The Jakarta Post | Fri, 10/10/2008 3:28 PM | Headlines

The capital market authority has summoned several brokers and financial firms allegedly responsible for spreading false information regarding the solvency of listed companies and securities.

Fuad Rahmany, head of the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK), told reporters Friday that if proven the suspect would be penalized.

"We have sensed the activity of certain individuals who spread false information with the aim of tumbling the market. We are currently investigating," Fuad said as quoted by state news agency Antara.

The Indonesia Stock Exchange (IDX) composite index fell 21 percent in three days, the biggest drop in a decade. All trading has been halted since Wednesday 11:06 p.m.

The government was initially going to reopen the market Friday, but refrained as the benchmark of the global stock indices, Dow Jones, suffered another blow, falling by 7.3 percent.

Fuad said there were many rumors in the market, one of them said 33 Indonesian securities were bankrupt.

"Misleading rumors and gossip spread everywhere nowadays, even in the U.S. But in such a condition it could have a significant impact to all investors. We will not let them reap benefits at the cost of the many," Fuad said.

Fuad and investigators from Bapepam-LK are scheduled to meet the suspects at 4 p.m. (and)

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