The Capital Market Authority announces the issuance of three final decisions—two by the Appeal Committee for Resolution of Securities Disputes (ACRSD) and one by the Committee for the Resolution of Securities Disputes (CRSD)—against three convicted persons. The said persons were convicted as one of them violated Article (49/a) of the Capital Market Law (CML), the second violated Article (24) of the Authorized Persons Regulations (currently: the Capital Market Institutions Regulations), and the third violated Article (31) of CML and Article (5) of the Securities Business Regulations. Fines totaling SAR 500 thousand were imposed on them.

The CMA stated that ACRSD issued its first final decision convicting Osama Wafiq Tawfiq As’ad (Assistant Director of Investment Banking with the Financial Consultant for Mohammad Al-Mojil Group Company during its IPO phase), after proving his responsibility – with the participation of others, whom were convicted by ACRSD decision No. (1189/L.S/2017 of 1438 H.), published on the CMA website on 14/06/1440 H. corresponding to 09/02/2019 – in neglecting to indicate material information in the Mohammad Al-Mojil Group Company’s (“Company’s”) IPO prospectus, represented in the existence of decline in the value of the Company standing projects in the first quarter of 2008, thus influencing the initial evaluation of the Company’s share during the IPO. ACRSD imposed a fine on the said person amounting to SAR 100 thousand and banned him from managing portfolios or working as an investment advisor for Five years, further, banning him from working in bodies under the supervision of the CMA for Five years as well.

As for the second final decision, issued by CRSD, it convicted Bader bin Abdullah bin Hamad Alhammad (registered person) for violating Article (24/a) of the Authorized Persons Regulations (currently: the Capital Market Institutions Regulations), and imposed a fine of SAR 200,000 on him, for his conduct, in his capacity as Chairman of the Board of Directors of 99Hlala Capital Company (formerly known as: Maceen Capital) and previously held an executive position in this Company, of violating the principle of integrity that must be adhered to while performing his duties as a registered person in one of the registration-required professions with the CMA, by exploiting the Company’s assets for his personal benefit, when he registered the ownership of lands purchased by the Company in his name without proof that the Company receiving financial compensation from him for such an act, as well as exploiting the funds of the Company’s clients for his personal benefit by making bank transfers from the pooled account of the Company’s clients in one of the banks to the Company’s account in the same bank, and then transferring such funds later on to his personal account in another bank, during the period from 15/01/2014 to 16/10/2019. The decision also included banning the said person from brokerage business, managing portfolios, and working as an investment advisor for Five years, as well as banning him from working in companies, shares of which are traded in the Saudi Exchange, for Five years.

In its third decision, ACRSD convicted Muhammad bin Mahdi bin Saleh Aldraibi Alzahrani for violating Article (31) of the Capital Market Law as well as Article (5) of the Securities Business Regulations, for practicing securities business, represented in the activity of “Advising", without obtaining a license from the CMA, by providing recommendations relating to listed shares in the USA exchanges through the social media application (WhatsApp) during the period between 03/11/2021 till 30/03/2022. ACRSD also imposed a fine on the said person amounting to SAR 200 thousand.  

The CMA explained that the final decisions resulted from joint coordination and cooperation between the CMA and the relevant authorities. These decisions were issued in light of the public penal lawsuits filed by the Public Prosecution—referred to it by the CMA—against the investors convicted in the first and third decisions, while the CMA filed its lawsuit against the investor convicted in the second decisions for their violations of the Capital Market Law and its implementing regulations.

The CMA stresses the importance of investors' confidence in the capital market for its growth and prosperity. The CMA continuously monitors any violations, identifies the perpetrators, and processes the necessary procedures to impose deterrent penalties against them, in order to enhance the CMA's efforts aimed at creating an attractive investment environment for all categories of investors and safe from unfair or unsound practices or that involve fraud, cheating, deception or manipulation.

From its side, the General Secretariat of the Committee for Resolution of Securities Disputes (GS-CRSD) announced that any person affected by these violations, subject to the first and second decisions, is entitled to file a compensation claim (as individual or class action) with the CRSD for the damage he/she suffered from due to these violations. Furthermore, any person who has entered into an agreement or contract with the third convicted person in relation to this violation is entitled to file a claim (as individual or class action) with the CRSD to request the rescission of the agreement or contract and the recovery of any money or other property paid or transferred under the agreement or contract, as per Article (60/b) of the Capital Market Law, provided that such claim is preceded by a complaint filed with the CMA on any of those three decisions, via the following link (File Complaint Link). However, the GS-CRSD will announce to the public on its website in case of registering any class action in order to enable the rest of the investors affected by such violations to apply to the CRSD to join the class action.

The CMA indicated that the GS-CRSD announced to the public on its website the identity of the violators in the three decisions after the violations and sanctions were proven and the final decisions were issued. The said decisions can be viewed through the following links:

Announcement from the General Secretariat of the Committees for Resolution of Securities Disputes (First Decision) Click Here

Announcement from the General Secretariat of the Committees for Resolution of Securities Disputes (Second Decision) Click Here

Announcement from the General Secretariat of the Committees for Resolution of Securities Disputes (Third Decision) Click Here