SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ACT, No. 19 OF 2021
https://www.sec.gov.lk/wp-content/uploads/2021/09/PL-012514-E-Securities.pdf
False trading and market rigging transactions
128.
(1) A person shall not create or cause the creation of or do anything that is intended to create –
(a) a false or misleading appearance of active trading of securities traded on an exchange licensed by the Commission or a platform operated by a recognised market operator; or False trading and market rigging transactions
(b) a false or misleading appearance with respect to the market for or the price of any such securities referred to in paragraph (a).
(2) A person shall not maintain, inflate or depress or cause inflation in the market price for any such securities –
(a) by means of any purchase or sale of any security that does not involve a change in the beneficial ownership of those securities; or
(b) by means of any fictitious transaction or device.
(3) Without prejudice to the generality of subsection (1), a person who –
(a) effects, takes part in, is concerned in or carries out, either directly or indirectly, any transaction of sale or purchase of any securities, being a transaction that does not involve any change in the beneficial ownership of the securities; or
(b) makes or causes to be made an offer to buy or sell such number of securities at a specified price where he has colluded with another or caused such collusion to be made with another or knows that a person associated with him has made with him or caused to be made with him an offer to purchase the same number or substantially the same number, of the same securities at a price that is substantially the same as the first mentioned price, shall be deemed to have created a false or misleading appearance of active trading in such securities.
(4) In dealing with a contravention of subsection (1) it shall be a defence if the person establishes that the purpose or purposes for which he purchased or sold the securities was not, or did not include, the purpose of creating a false or misleading appearance with respect to the market for or the price of such securities.
(5) For the purposes of subsection (3), it is a defence for a person to establish that–
(a) the purpose for which he did the act was not or did not include, the purpose of creating a false or misleading appearance of active trading on an exchange or a platform operated by a recognised market operator; and
(b) he did not act recklessly, whether or not he created a false or misleading appearance of active trading on an exchange or a platform operated by a recognised market operator.
(6) For the purposes of this section, a purchase or sale of securities does not involve a change in the beneficial ownership, if a person or a person associated with such person had an interest in such securities before the purchase or sale and continues to have an interest in such securities after the purchase or sale.
(7) The reference in paragraph (a) of subsection (3) to a transaction of sale or purchase of securities includes - (a) the making of an offer to sell or purchase securities; and
(b) the making of an invitation, that expressly or impliedly invites a person to offer to sell or purchase securities.
147. (1) A person who contravenes sections 128, 129, 130, 131, 132 or subsections (2) and (3) of section 137 commits an offence and shall be liable on conviction to a fine of not less than ten million rupees or to imprisonment for a term not exceeding ten years or to both such fine and imprisonment.