Karunaratne said the stocks were pumped and dumped on unsuspecting investors during a stock market bubble which peaked around 2011.

He said investors who lost money during the period are still calling and making complaints against some brokers and margin providers.

"I am trying to do justice to those who got really played out," Karunaratne told lawyers at Sri Lanka's National Law Conference 2014.

He said the SEC had a "poor record". He said the public perception was also that no serious frauds were tackled by the regulator.

SEC was also amending its underlying law and it was being reviewed again. The changes may take up to 18 months to be passed in parliament, he said.

The new law will no longer allow serious frauds to be "compounded" or to settle with a fine without agreeing to guilt and there will be provisions to encourage whistle blowing and to give bounties.

(economynext.com)