CMA: 15 convicts fined SAR 10.7M; violators, others ordered to pay SAR 12M

The Capital Market Authority (CMA) announced the issuance of the Appeal Committee for the Resolution of Securities Disputes' (ACRSD) two final decisions against 15 individuals 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.

The total fines imposed exceed SAR 10.7 million, while the convicts and other investors were ordered to pay more than SAR 12 million to disgorge illegal gains realized from these violations, the market regulator said in a statement today, May 14.

In accordance with the ACRSD's first decision, the convicts are: Hassan Almayouf, Shahd Alrasheed, Saleh Alrasheed, Latifa Alsulaiman, Omran Alomran, Reem Alomran, Afnan Alomran, Ahmad Alhuwaimel, Noura Alhuwaimel, Muhammad Alhoushan, Ahmad Alhoushan, Abdullah Alhoushan, Omar Alhoushan, Khaled Aljeraiwi, and Muhammad Omran.

The convictions relate to trading activities on shares of several insurance firms between Aug. 30, 2021, and July 6, 2022. These companies include: Mutakamela Insurance Co. (previously known as Allianz Saudi Fransi Cooperative Insurance Company), Saudi Arabian Cooperative Insurance Co. (SAICO), Arabia Insurance Cooperative Co., Al Sagr Cooperative Insurance Co., United Cooperative Assurance Co., and CHUBB Arabia Cooperative Insurance Co.

The violations involved manipulative and fraudulent practices aimed at creating a misleading and incorrect impression of the securities. Specifically, the individuals used their investment portfolios (or those they managed) to enter buy orders intended to influence share prices, some of which were linked to sell orders.

The second decision convicted Khaled Aljeraiwi of violating Article (31) of the Capital Market Law as well as Article (5) of the Securities Business Regulations for practicing securities business (management), without obtaining a license from the CMA. Accordingly, he was banned from practicing brokerage activities, managing portfolios, or working as an investment advisor for five years, in addition to the other imposed fines and penalties.

The final decisions of ACRSD came as a result of joint coordination and cooperation between CMA and the relevant concerned authorities, and in light of the public penal lawsuit filed by the Public Prosecution, referred to it by CMA, against the investors for violating the Capital Market Law, said the regulator.

CMA also stressed 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 regulator also 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.