The CMA: Obligating (3) Violators to pay More than (115) Million Saudi Riyals against Illegal Gains
17/08/2023

The Capital Market Authority (CMA) announced that the Committees for Resolution of Securities Disputes (CRSD) issued two final decisions convicting three individuals of violating the Capital Market Law as well as violating the Market Conduct Regulations. The convicted individuals were obligated to pay the total amount of illegal gains which reached more than (115) million Saudi Riyals, in addition to imposing financial sanctions upon them amounting to (2.45) million Saudi Riyals.

The CMA indicated that the Appeal Committee for Resolution of Securities Disputes (ACRSD) issued its first final decision convicting each of: Sultan bin Abdulaziz bin Abdullah Albanyan, Abdullah bin Abdulaziz bin Abdullah Albanyan and Fahad bin Abdulaziz bin Abdullah Albanyan, for violating Article (49/a) of the Capital Market Law, and obligating them to pay the total amount of illegal gains that reached to (60.74) million Saudi Riyals and imposing financial sanctions amounting to (300) thousand Saudi Riyals, due to performing a series of procedures and transactions represented in making financial and share transfers as well as special trades on the shares of Al Kathiri Holding Co., aiming to hide their ownership percentage in the Company, hence resulting in the creation of an untrue impression regarding the number of shares available to the public, during the period between 30/05/2019 and 10/10/2019, prior to moving the Company to the main exchange market on 03/11/2019. Such act led to affecting the share price on the next day of the Company's announcement that it had submitted to be moved to the main exchange market, as such acts and practices created a false and misleading impression regarding the security of the Company.  

On the other hand, the ACRSD convicted in its second final decision Fahad bin Abdulaziz bin Abdullah Albanyan of violating Article (49/a) of the Capital Market Law, as well as Article (2) of the Market Conduct Regulations, when trading in the shares of the following companies: Naseej International Trading Co., Saudi Cable Co., National Metal Manufacturing and Casting Co., Tihama Advertising and Public Relations Co., Red Sea International Co., Saudi Fisheries Co., Ash-Sharqiyah Development Co., Allianz Saudi Fransi Cooperative Insurance Co., Abdullah Saad Mohammed Abo Moati for Bookstores Co., Al-Omran Industrial Trading Co., Raydan Food Co. and Sumou Real Estate Co., and obligating him to pay the total amount of illegal gains that reached (55.04) million Saudi Riyals, and imposing a financial sanction upon him amounting to (2.15) million Saudi Riyals, during the period between 15/01/2019 and 25/11/2020. His violation is represented in his act through his portfolio of entering purchase orders aiming to affect the share price of the abovementioned companies, and entering purchase orders aiming to achieve high bid closing price. Such acts and practices represent fraud and manipulation, and created a false and misleading impression regarding the securities of the abovementioned companies.  

In addition to the financial sanctions, both decisions included the imposition of another sanction on Fahad bin Abdulaziz bin Abdullah Albanyan, that stipulate banning him from trading through purchase of shares in companies listed in the Saudi Exchange for himself or on behalf of others, excluding trading through investment funds with Authorized Persons, for a period of Three years, according to the first decision. Another ban was issued against him from trading through purchase of shares in companies listed in the Saudi Exchange for himself or on behalf of others for a period of One year, according to the second decision.

The CMA stated that the two ACRSD final decisions came as a result of joint coordination and cooperation between the CMA, the Public Prosecution and the relevant security authorities, and in light of the public penal case filed by the Public Prosecution which was referred to it by the CMA against a number of violators.

In this regard, the CMA stresses on the importance of what investors' confidence represents in the growth and prosperity of the financial market. The CMA works continuously to monitor any behavior that violates the Capital Market Law, its implementing regulations and any regulations that the CMA is charged to enforce, find the perpetrators, and complete the necessary procedures to impose deterrent penalties against them. It is within the CMA's efforts that aim at creating an investment environment that is attractive to all categories of investors and safe from unfair or improper practices that involve fraud, deception, misrepresentation, misleading or manipulation. The CMA also calls upon all market participants to consider illegal practices as a criminal offense, and perpetrators are subject to legal accountability and the imposition of penalties stipulated in the regulations that the CMA is competent to enforce.

The CMA also stresses that it will not hesitate to pursue financial market manipulators by monitoring their transactions based on its powers in accordance with the Capital Market Law, and using its advanced technical means that enable it to observe all transactions and monitor suspicious cases, and take the necessary legal measures in accordance with laws and regulations, in addition to coordinating with security authorities, each according to their powers, to track down anyone who attempts to manipulate or practice deception  in the exchange market. This comes to achieve the CMA's objectives towards enhancing the efficiency of the exchange market, protecting its dealers and ensuring that they are not deceived or manipulated.

Furthermore, any person affected by these violations in this case is entitled to file a compensation claim (as individual or class action) with the CRSD against the convicted individuals 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). However, the General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) will announce to the public on its website in case of registering any class action in order to enable the rest of 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 identities of the violators after proving the violations and penalties, and after issuing the two final decisions of the ACRSD against who violates the laws of the capital market and its implementing regulations. The details of the two decisions can be viewed through the following links:

Announcement of the GS-CRSD – First Decision (click here)

Announcement of the GS-CRSD – Second Decision (click here)​​