According to the SEC, today's stock manipulators have become so much more sophisticated in their operations that it is almost impossible to nail them with the transaction records of their stock trading portfolios. With huge cash and loan facilities at their disposal, these people can, individually or acting together, dictate price movements of targeted stocks or, to a certain extent, even manipulate the general direction of the local bourse, and enrich themselves in the process.

These stock-market manipulators are operating like a syndicate, trading stocks on their own accounts and their own money. They work in a seemingly independent fashion, although in practice they have various methods of sending signals to each other. This problem is not unique to the Thai stock market alone. Malaysia is also facing a similar problem of syndicated stock market manipulation.

Looking at the transaction records, it is difficult, if not impossible, to determine whether suspected manipulators were only speculating on price movements of specific stocks or whether they were trying to nudge them toward the target price range so they could make a killing. The object for them, of course, is to sell off stocks they had earlier accumulated at relatively low cost and pocket huge profits.

Apparently, stock manipulators now know better. Their tactics have developed so that they spread their war chests over a large number of trading accounts and they take longer to build their positions in order to influence stock price movements.

Several of the so-called "penny stocks" were believed to have been manipulated in this way, resulting in the fluctuation of share prices of targeted companies for no apparent reasons. This in turn contributes to the volatility of the stock market.

Many retail investors who think they can make quick cash by playing along with stock manipulators soon lose their shirts.

The best the SEC, the Stock Exchange of Thailand and stockbrokers can do is to impose certain restrictions. Measures include suspension of trade in stocks with excessive price swings, suspension of margin loan facilities or a temporary ban on net settlement securities trading.

Stock market manipulation will continue to be a fact of life in the Stock Exchange of Thailand and indeed any other stock market in the world. But the fact that it is becoming more and more difficult to nail stock manipulators doesn't mean the SEC and the management board of the stock market should sit on their hands and do nothing and that all market players should practise caveat emptor. There is still room for improvement in the way the SEC and the stock market authority enforce existing rules and regulations to make it more difficult for manipulators to play their tricks to distort stock trading. Improvement will make it more likely that wrongdoers are brought to justice.

To do that, the SEC must be de-politicised. It is encouraging that the SEC is in the process of working out a way to revamp its board of directors to guard against interference by politicians. One of the key changes will be to remove the finance minister as SEC chairman. At present, the finance minister is appointed SEC chairman by virtue of his office. Freeing the SEC from political interference will go a long way toward ensuring independence and effectiveness in ensuring good governance of listed companies and a level playing field for all stock-market participants.

All too often in the past, SEC probes into stock-market manipulation, questionable transactions and fraudulent practices by politicians, their families or their associates and cronies have failed to lead to successful prosecution. Various government agencies, whose duty it is to assist the securities watchdog in its investigations, mysteriously fail to do their job properly. This is a flaw in the due process of the justice system that must be rectified.