Eight people found guilty of violating Saudi financial market law, ordered to pay $80 million
RIYADH: Eight investors found guilty of violating Saudi Arabia’s capital markets law have been fined 9.6 million riyals ($2.559 million) and have been charged with paying over their investment portfolios and those of one of their young children. He was ordered to repay 292.8 million riyals of illegal profits from three individuals. those who have been convicted of a crime.
The Capital Markets Authority said in its final judgment that the Securities Dispute Settlement and Appeals Board had ruled against Abdulaziz bin Abdullah bin Issa Albanian and his four sons, Faisal, Sultan, Abdullah, Fahad, and two daughters, Reem and announced that Reem had been found guilty. Nuh, Hind bint Mohammed bin Abdulrahman bin Asaker.
They were found to have violated capital market laws and market conduct regulations in trading the shares of two companies listed on the Saudi Stock Exchange Tadawul: Al-Kathiri Holding and Anaam International Holding Group. Their activities included simultaneous increases in ownership percentages and coordinated sales of shares, primarily during his 2020.
ACRSD ordered the preventive seizure of all movable and immovable property of the guilty parties, including bank and investment accounts, until the imposed fines are paid.
The investigation revealed that the origins of the illegal activity can be traced back to June 7, 2020, when Sultan purchased 225,000 shares of Al Qasiri Holding from a company executive. This comes 19 days after the company announced that it had applied to the CMA for permission to increase its capital by issuing preference shares.
On June 11, Fahad transferred 225,000 shares of the company’s stock into his portfolio in the name of his minor daughter, and on August 23, he purchased a similar amount from a company executive in a private transaction.
From then until October 5 of the same year, the convicted individuals continued to purchase stocks and engage in transactions related to stock speculation. They increased their combined ownership in the company to 24 percent without disclosing this or their family ties to Tadawul.
During this period, the stock price rose to over SR54. On October 5, Mr. Fahad used his children’s portfolio to place a buy order in the closing auction, achieving a high closing price.
The investigation also found that stocks were transferred between the brothers’ portfolios through simultaneous buy and sell orders of the same quantity, timing, and price.
Mr Fahad was found to have transferred approximately R4.7 million to Abdullah to provide liquidity for Abdullah to purchase shares in the same company. Abdullah bought 100,000 shares of the company sold by Fahad.
In the case of Anaam International Holding Group, on 9 February 2020, the board recommended that the company increase its capital by issuing preference shares of R75 million. Mr Fahad then transferred 74,900 shares to the portfolio of his minor son.
Three days later, he bought the same amount of stock. Some purchases affected the stock price. The next day, he transferred the same amount to his daughter’s portfolio, who is also a minor, purchasing a total of 73,910 shares between May 19 and June 1.
On October 6, 2020, the company held an extraordinary general meeting of shareholders to discuss its capital increase plan. The following day, for more than 20 consecutive days, the convicts engaged in speculative activities and collectively sold 27 shares of the company without disclosing this to Mr Tadawul despite their family connections. It turned out that the percentage was increased. During this time, the stock price increased by approximately SR115.
However, the CMA’s monitoring system detected suspicious activities such as private transactions and share transfers carried out with the aim of acquiring large stakes in both companies without disclosing the full details of the connections between the individuals to Mr Tadawul. was.
“These actions resulted in misleading investors on the exchange and created a false and misleading impression regarding the securities of the two companies mentioned,” the CMA said.
It added that the final judgment by the ACRSD was the result of a joint effort by multiple authorities and a case brought by prosecutors.
Maintaining investor confidence in capital markets is important for growth and prosperity, and authorities therefore need to take appropriate steps to identify those who break the rules and hold them accountable, including by imposing penalties as a deterrent to such behavior. He stated that it is important to take appropriate measures. Toward building a safe and fair investment environment.
Investors who have been adversely affected by illegal conduct such as the one involved in this case have the right to seek compensation for their losses from the Securities Dispute Resolution Board, either individually or as part of a class action. Prior to the filing of the complaint he filed a complaint with the CMA.
