CMA: Conviction of 10 Investors for Violating the Capital Market Law and its Implementing Regulations, Fining Them SAR 860 K, and Obligating Them and Other Investors to Pay Over SAR 96 Million
The Capital Market Authority (CMA) announces the issuance of the Appeal Committee for Resolution of Securities Disputes’ (ACRSD) final decision against ten investors for violating Article (49.a) of the Capital Market Law and Article (2.a) of the Market Conduct Regulations. They were fined a total of SAR 860,000 and obligated, along with other investors, to pay more than SAR 96 million against illegal gains resulting from these violations.
According to the decision of the ACRSD, the following individuals were convicted: Ibrahim bin Abdullah bin Muhammad Aljunaidli, Ahmad bin Ali bin Sulaiman Alyahya, Ismail bin Saleh bin Muhammad Alhathlol, Khaled bin Abdullah bin Shlash Alshlash, Daham bin Muhammad bin Hamoud Aldaham, Abdulrahman bin Abdullah bin Abdulrahman Aloraini, Abdulmalik bin Abdulaziz bin Suliman Alsukait, Ali bin Saleh bin Ali Alothaim, Majed bin Romi bin Sulaiman Alromi, and Sulaiman bin Muhammad bin Saleh Alothaim, of violating Article (49.a) of the Capital Market Law and Article (2.a) of the Market Conduct Regulations, for their act solely and collectively of entering purchase and sale orders with the aim of influencing the share price, and entering sale orders with the aim of achieving higher closing bid price, when trading on the shares of Dar Alarkan Real Estate Development Co. during the period between 03/02/2019 until 12/05/2020, through their portfolios or other portfolios that they manage. Such acts and practices constituted manipulation and fraud, and created a false and misleading impression regarding the security of the abovementioned Company.
The ACRSD, in its final decision, obligated the ten convicted individuals to pay SAR 64.2 million against illegal gains achieved in their investment portfolios as a result of the violations for which they were convicted. In addition, a number of investors were obligated to pay a total amount of SAR 31.9 million to the CMA’s account, against the illegal gains achieved in their portfolios that resulted from the illegal trading committed by the convicted persons: Ismail bin Saleh bin Muhammad Alhathlol, Ali bin Saleh bin Ali Alothaim, and Majed bin Romi bin Sulaiman Alromi, or as a result of benefiting from such illegal trading.
Additionally, the ACRSD ruled to impose a fine of SAR 860 thousand on the convicted individuals and banned all of them from trading by purchasing shares, directly or indirectly, in the capital market for periods ranging from two to three years.
The CMA explained that the final decision of ACRSD came as a result of joint coordination and cooperation between the CMA and relevant concerned authorities, and in light of the public penal lawsuit filed by the Public Prosecution, referred to it by the CMA, against the investors for violating the Capital Market Law.
The CMA stresses the importance of investors' confidence in the capital market for its growth and prosperity. The CMA continuously monitors any violating behaviors, 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, misleading, deception or manipulation.
Furthermore, any person affected by these violations, in this case, is entitled to file a compensation claim (as individual or class action) against the convicted persons 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). Furthermore, the General Secretariat of the Committee 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 identity of the violators after the violations and sanctions were proven and the final decision was issued by ACRSD. It can be viewed through the following link (Announcement link)
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