The State Securities Commission of Vietnam (SSC) decided to block the securities accounts of Trinh Van Quyet, chairman of conglomerate FLC, from Tuesday until further notice as he had failed to report his sale of nearly 75 million FLC shares early this week.

The SSC has tasked the Vietnam Securities Depository with freezing all of Quyet’s trading accounts and required securities companies to stop all transactions requested by the FLC executive.

The decision was based on Decree No.155/2020, which allows the stock watchdog to seal an individual’s account to verify details related to that person’s violations.

The Ho Chi Minh City Stock Exchange (HoSE) on Tuesday announced it had canceled the transactions of the 74.8 million FLC shares which Quyet had made on Monday without giving a heads-up.

The law requires major shareholders of listed companies to announce their planned transactions in advance.

Nearly 135 million FLC shares were exchanged on the market on Monday, far higher than the daily average of 15 to 45 million shares.

H., an investor, said he rushed to buy FLC shares on Monday morning at VND24,100 (US$1) per share and expected to see a threefold or fourfold increase in the coming days.

However, FLC plunged to the floor price of VND21,150 ($0.9) in afternoon trade on the same day.

Chairman Quyet previously registered to sell 175 million FLC shares between January 10 and 17, reducing his ownership in the company from 30.34 percent to 5.7 percent.

The information was stated in a document signed by chairman Quyet on January 5, but the SSC did not receive it until the end of Monday afternoon.

FLC, with portfolios ranging from real estate to aviation, did not publish the information on its official website between January 5 and 10.

The SSC previously announced that it was working with relevant authorities to impose a fine upon Quyet for his violation.

Deputy Minister of Finance Nguyen Duc Chi has asserted that a stern penalty must be imposed to deter similar offenses in the future.

Nguyen Hoang Hai, secretary-general of the Vietnam Association of Financial Investors, suggested that competent authorities consider criminally charging Quyet aside from slapping him with an administrative fine.

Concealing information regarding the listing and trade of stocks that results in serious consequences is punishable by a fine worth VND100 million ($4,400) to VND2 billion ($88,000), a non-custodial sentence of up to two years, or a jail term of three months to five years, Hai quoted the Penal Code as saying.

Hai stressed that Quyet’s violation had negatively affected FLC as well as local investors, businesses, and the economy in general.

The incident led to investors rushing to sell FLC shares on Tuesday, causing the code to plunge to the floor price of VND19,100 ($0.84).

Statistics showed that about 154.95 million FLC shares were traded on Tuesday.

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