The CMA: Conviction of 15 Violators of the Capital Market Law and its Implementing Regulations, Fining them More than SAR 10.7 Million, and Obliging them, with Other Investors, to Pay more than SAR 12 Million
The Capital Market Authority (CMA) announces the issuance of the Appeal Committee for the Resolution of Securities Disputes' (ACRSD) two final decisions against 15 Violators for violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations, as well as convicting one of them for violating Article (31) of the Capital Market Law and Article (5) of the Securities Business Regulations, in addition to fining the convicted persons more than SAR 10.7 million and obliging them, with other investors, to pay more than SAR 12 million against illegal gains achieved as a result of such violations.
In accordance with the ACRSD's first decision, the conviction comprises the following names: Hassan bin Abdulkarim bin Ibrahim Almayouf, Shahd bint Ghudayr bin Saleh Alrasheed, Saleh bin Ghydayr bin Saleh Alrasheed, Latifa bint Fawzan bin Abdulrahman Alsulaiman, Omran bin Muhammad bin Omran Alomran, Reem bint Muhammad bin Omran Alomran, Afnan bint Muhammad bin Omran Alomran, Ahmad bin Sa'ad bin Abdullah Alhuwaimel, Noura bint Abdullah bin Sa'ad Alhuwaimel, Muhammad bin Abdullah bin Muhammad Alhoushan, Ahmad bin Muhammad bin Abdullah Alhoushan, Abdullah bin Muhammad bin Abdullah Alhoushan, Omar bin Muhammad bin Abdullah Alhoushan, Khaled bin Ibrahim bin Abdullah Aljeraiwi, and Muhammad bin Nasser bin Muhammad bin Omran, for violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations, when trading in the shares of the following listed companies: Mutakamela Insurance Co. (previously known as Allianz Saudi Fransi Cooperative Insurance Company), Saudi Arabian Cooperative Insurance Co. (SAICO), Arabia Insurance Cooperative Co. (Arabia Insurance), Al Sagr Cooperative Insurance Co. (Al Sagr Insurance), United Cooperative Assurance Co., and CHUBB Arabia Cooperative Insurance Co., during the period from 30/08/2021 until 06/07/2022, as such acts and practices represented manipulation and fraud, and created a false and misleading impressions regarding the securities of the abovementioned companies. Their violations are represented in their acts, using their portfolios or the portfolios they manage, of entering purchase orders aiming to affect the price of shares, some of which are linked with sale orders.
The second decision included the conviction of Khaled bin Ibrahim bin Abdullah Aljeraiwi of 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 (Managing), by managing two portfolios without obtaining a license from the CMA.
The two decisions included the imposition of a number of sanctions on convicted persons, including imposing varying fines amounted to more than SAR 10.7 million, and obliging 13 convicted persons to pay more than SAR 6.7 million against the illegal gains achieved in their portfolios. Further, the ACRSD banned the convicted person, Khaled bin Ibrahim bin Abdullah Aljeraiwi, from trading directly or indirectly in the Exchange for a period of five years, in addition to banning him from brokerage business, managing portfolios or working as an investment advisor for five years.
The ACRSD also obliged a number of investors to pay more than SAR 5.5 million against the illegal gains achieved in their portfolios resulting from the violating trades committed by the convicted persons: Khaled bin Ibrahim bin Abdullah Aljeraiwi, Omran bin Muhammad bin Omran Alomran and Muhammad bin Nasser bin Muhammad bin Omran.
The CMA explained that the final decisions of ACRSD came as a result of joint coordination and cooperation between the CMA and the 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 and ensuring it is safe from unfair or unsound practices or those that involve fraud or manipulation.
The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD), from its side, announced that any person affected by these violations is entitled to file a compensation claim (as individual or class action) against the convicted persons with the CRSD for the damage he/she suffered due to these violations. Further, any person who has entered into an agreement or contract with the convicted Khaled bin Ibrahim bin Abdullah Aljeraiwi, regarding the violation of Article (31) of the Capital Market Law, is entitled to file a claim 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, in either of the two decisions, this must be preceded by filing a complaint with the CMA in this regard via the following link: (Link to file a complaint). Note that the GS-CRSD will announce to the public on its website upon the filing of any class action lawsuit, to enable other investors affected by the same violations to apply to the ACRSD to join the class action.
The CMA indicated that the GS-CRSD has announced to the public on its website the identity of the violators after the violations and sanctions were established and the final decisions were issued by the ACRSD. These can be viewed through the following link:
GS-CRSD Announcement Click Here.
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