The Capital Market Authority would like to announce to all participants and investors in the Saudi stock Exchange that it has detected, through follow-up procedures, a group on a social media program that includes more than (250) members, through which internal information is disclosed for companies listed in the Saudi stock Exchange before it is announced in a regular manner by those companies on the Saudi Tadawul Group's website, among that inside information are advertisements related to (a company contracting with another company to provide cooperative health insurance services, positive financial results for a company, capital increase and distribution of cash dividends to shareholders). In addition, the supervisor of the aforementioned group committed a number of violating behaviors by promoting opinions related to companies listed on the Saudi stock Exchange through the group in order to influence their prices and his personal benefit from it, as well as managing a number of portfolios without obtaining a license from the CMA, and exploiting those portfolios to commit violations involving manipulation and misleading in the Saudi Stock Exchange.
Whereas, the seizure and deduction procedures resulted in committing a number of persons violations related to disclosing inside information for companies listed on the Saudi Stock Exchange, and some of the suspects work in companies listed on the Exchange, and after identifying those responsible for these violations; the CMA Board resolution has been issued regarding the referral of several suspicions to the Public Prosecution, according to the following:
- The referral of the group supervisor regarding the violation of Articles (31) and (49) of the Capital Market Law and Article (5) of the Securities Business Regulations and Articles (2) and (8) of the Market Conduct Regulations to the Public Persecution by a suspect for his responsibility of managing a number of portfolios in the Saudi Stock Exchange without obtaining a license from the CMA and carried out practices that involve manipulation and fraud in market trades, which resulting suspicion of his trading through his portfolios and portfolios managed by him on the shares of a number of listed companies on the Saudi Stock Exchange, where the suspicion cases were regarding a number of violating behaviors included his responsibility with another suspect of the entry of purchase orders that aims to influence the share price, the entry of purchase orders in the closing auction with the aim of achieving a high closing price and the entry of an order for the sale of a security with prior knowledge that an order of the same size, time and price for the sale of that security, has been or will be entered. In addition to, trading (by purchasing) in the shares of a number of listed companies, then promoting opinions via aforementioned group for the purpose of influencing the price of the security, then trading (by selling) the shares of the listed companies affected by the promoting opinions and his personal benefit from it.
- The referral of a suspicion regarding the violating of Article (50) of the Capital Market Law and Article (5) of the Market Conduct Regulations by a number of insiders, among them are employees in a number of listed companies on the Saudi Stock Exchange. where they disclosed inside information related to these companies before it is announced in a regular manner on the Saudi stock Exchange's website.
- The referral of a suspicion regarding the violation of Article (50) of the Capital Market Law and Article (6) of the Market Conduct Regulations by two suspects. Where they traded two companies listed on the Exchange based on inside information related to a potential merger between them.
The CMA assures its devotion to apply the Capital Market Law and its Implementing Regulations, and protect the market from illegal practices. The CMA calls on all participants and investors in the Saudi Stock Exchange to limit their transactions in securities to the capital market institutions authorised by the CMA to carry out securities business. It further request them not to deal with unauthorised persons, whether they were of legal or natural personality where their business is promoted via social media or any other means, and must ensure that the persons with whom they deal have obtained the Authority's authorisation, or visit the CMA's website on WWW.CMA.ORG.SA to view the list of the authorised capital market institutions.
The Authority also calls upon all participants in the capital market to maintain the confidentiality of information in companies listed in the capital market, and that the disclosure of inside information or trading based on it, is a violation of the provisions of the Capital Market Law and the Market Conduct Regulations, which exposes participants to legal accountability and the imposition of penalties contained in the Law. It is worth noting that the General Secretariat of Committees for Resolution of Securities Disputes will announce to the public the identities of convicted violators on its website upon the issuance of final decisions by the Committees for Resolution of Securities Disputes. Moreover, any person affected by these violations is entitled to file a compensation claim, after conviction, against the violators before to the Committee for the Resolution of Securities Disputes as per Article (57) of the Capital Market Law, Furthermore, any person who has entered into any agreement or contract with an unauthorised person is entitled to file a claim, individually or collectively, to the Committee for the Resolution of Securities Disputes to rescind the agreement or contract and recover any money or other property paid or transferred pursuant to such agreement or contract, in accordance with paragraph (b) of Article (60) of the Capital Market Law, provided that these claims are preceded by a complaint filed to the CMA (via this link).
(To view the dates of trading and the securities in relation to the violation, click here)
