Today, the Capital Market Authority (CMA) announced the issuance of the Committees for Resolution of Securities Disputes' final decision convicting (17) persons of violating Article (49/a) of the Capital Market Law, and Article (2/a) of the Market Conduct Regulations. The decision obliged violators and (5) investors to pay the total illegal gains that amounted to (1.196) billion Saudi Riyals, as well as imposing fines upon the convicted violators that exceeded (6) million Saudi Riyals.
The CMA indicated that the final decision of the Appeal Committee for Resolution of Securities Disputes' (ACRSD) came as a result of joint coordination and cooperation between the Authority, the Public Prosecution, and the law enforcement authorities, and in light of the public penal lawsuit filed by the Public Prosecution, which was referred to it by the CMA, against a number of violators of the Capital Market Law and its Implementing Regulations, when the convicted persons traded in the shares of Dar Alarkan Real Estate Development Company during the period between 27/04/2017 and 23/01/2018, as well as the period between 18/02/2018 and 31/05/2018, as their trading form acts and practices considered manipulation and fraud, hence created a false and misleading impression regarding the security of the said company. Their violations are represented in their acts, through their portfolios or the portfolios they manage, of entering purchase orders and sale orders aiming to affect the price of the share, and entering purchase orders and sale orders aiming to affect the closing share price.
The CMA clarified that the decision of the ACRSD, obligated the (17) convicted violators to pay to the CMA's account a total amount exceeding (796) million Saudi Riyals, against the illegal gains achieved in their portfolios and fined them (6) million Saudi Riyals for committing violations through their portfolios, and for exploiting their management of portfolios belonging to five other investors to commit the same violations. The decision also included obliging the five investors to pay a total amount exceeding (399) million Saudi Riyals against the illegal gains achieved in their portfolios.
In addition to the fines imposed on the convicts, which exceeded six million Saudi riyals, the decision also included imposing other sanctions upon the convicted violators, which included banning them from trading, directly or indirectly, and banning them from managing portfolios for periods ranging from six months to one year.
The CMA stresses the importance of what the investors' confidence in the capital market represents for its growth and prosperity. The CMA continuously monitors any behavior that violates the Capital Market Law, its Implementing Regulations and the rules that the CMA is competent to enforce, arrests the perpetrators of such violations, and completes necessary procedures to impose deterrent sanctions against them, in order to enhance the CMA's efforts aimed at creating an investment environment that is attractive to all categories of investors and secure from unfair or improper practices or that involve fraud, manipulation, misrepresentation, or misleading. Additionally, the CMA calls upon all who deal in the capital market that illegal practices that form fraud, manipulation, misrepresentation, and misleading are considered criminal offences, perpetrators of which are subjected to legal accountability and the imposition of sanctions stipulated in the Capital Market Law.
The CMA also stresses that it will not hesitate to pursue capital market manipulators by monitoring their transactions based on its powers in accordance with the Capital Market Law, using its advanced technical means that enable it to monitor all transactions and monitor suspected cases, and take necessary legal measures in accordance with the rules and regulations, in addition to coordinating with the law enforcement authorities, each according to its jurisdictions, to track anyone who attempts to practice manipulation or deception in the capital market. These efforts comes together in order to achieve the CMA objectives towards enhancing the efficiency of the capital market, protecting who deals in it, and ensuring that they do not fall in deception or manipulation.
Furthermore, any person affected by these violations in this lawsuit is entitled to file a compensation claim (as individual or class action) against violators with the Committee for Resolution of Securities Disputes (CRSD) for the damage he/she suffered from due to these violations, provided that such claim is preceded by a complaint filed with the CMA on this regard, via the following link: (File Complaint).
In addition, the CMA indicated that the General Secretariat of CRSD announced to the public on its website the identities of these violators after proving their violations and sanctions, and issuing the final ruling by ACRSD against all violators of the Capital Market Law and its Implementing Regulations. The announcement details can be found through following this link:
Announcement of the GS-CRSD click here.
(To view the dates of trading and securities in relation to the violations, click here)
