Investment firm, 3 persons fined on violating Capital Market Law

Logo of the Capital Market Authority (CMA)

The Capital Market Authority (CMA) imposed fines on an investment company and three investors for violating the Capital Market Law and its Implementing Regulations. Fines worth a total of SAR 4.1 million were imposed on the three investors and the investment company. Two convicted persons and other investors were also ordered to pay a fine of SAR 5.91 million, while another convicted person got a 90-day jail sentence.

The CMA explained that these actions and practices constituted manipulation and fraud, creating a misleading and incorrect impression regarding the securities of the mentioned companies.

A fine of SAR 1.675 million was imposed on the convicted Abdulrahman bin Saleh Al-Rashed, in addition to requiring him to pay SAR 1.252 million for the illicit gains made on his investment portfolio and SAR 2.261 million for the illicit gains made on the investment portfolios of his two minor children.

Additionally, a fine of SAR 230,000 was imposed on the convicted Nasser bin Abdulaziz Al-Turki, along with an obligation to pay SAR 538,000 for the illicit gains on his investment portfolio.

Other investors were also required to pay SAR 1.864 million for illicit gains obtained from their investment portfolios, which resulted from the violative trades committed by Abdulrahman bin Saleh Al-Rashed.

As for the second final ruling, it included the conviction of both Maeana Investment Co. and Faisal bin Saad bin Mubarak Al-Qarnain Al-Dosari, in his capacity as its Chairman.

They were found guilty of engaging in securities-related activities, specifically dealing and arranging.

Maeana publicly advertised for practicing these activities by signing agreements with 2060 Agricultural Co. and Motqen for Parcel Transport Co. These agreements involved Maeana committing to manage the IPO process for these entities after their legal transformation, completing capital increase procedures, securing investors, meeting with potential subscribers, collecting subscription funds, and receiving payments for these services—all without being licensed by the CMA.

As a result, the Appeal Committee for Securities Disputes imposed a fine of SAR 1.5 million on Maeana and another worth SAR 750,000 on Faisal bin Saad Al-Dosari, along with a 90-day prison sentence.

The authority clarified that the final rulings issued by the Appeal Committee for Securities Disputes resulted from joint coordination and cooperation between the authority and relevant entities, based on public criminal cases filed by the Public Prosecution following CMA referrals, given the Capital Market Law infringments.