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Second sheriff runs out of town

A case of demand … and supply.

The head of Sri Lanka’s market regulator resigned Friday, saying he come under pressure at the behest of powerful stock market players being investigated for stock manipulation. (See Reuters’ report)

Securities and Exchange Commission chief Tilak Karunaratne had been pushing for investigations into stock market malpractice, including so-called pump-and-dump deals in which investors are lured into apparently cut-price equities.

"I don't even call them investors. They are crooks. The pressure from those crooks goes elsewhere and then in turn that party is exerting pressure on me," Karunaratne told Reuters.

Although he did not elaborate, he didn’t need to.

Last month, President Mahinda Rajapaksa, who is also the finance minister, met Karunaratne, high net worth investors and top Colombo Stock Exchange officials to discuss the market.

Karunaratne’s resignation was the second in less than nine months - his predecessor left amid complaints from brokers that tougher regulations were hurting stock market prices.