The Saudi Capital Market Authority (CMA) has imposed fines totaling SR17 million on 13 individuals for violations of the Capital Market Law. The convicts have also been ordered to pay SR84,790,955.51 to the CMA for illegal gains made on their investment portfolios. The General Secretariat of the Committees for Resolution of Securities Disputes under CMA announced the final decision of the Appeal Committee for Resolution of Securities Disputes in a general criminal case filed by the Public Prosecution against the 13 convicts. The decision also requires other investors to pay a total amount of SR1,155,691.2 to the authority’s account for illegal gains resulting from the actions of two of the convicts.
The convicted individuals were found guilty of violating Article 49 of the Capital Market Law and Article Two of the Market Conduct Regulations by placing purchase orders with the intention of influencing share prices. Some of these orders were linked to sales orders while trading in the shares of 11 companies between May 4, 2020 and May 20, 2021. These actions amounted to manipulation, fraud, and created a misleading impression regarding the securities of the companies involved. Any individual affected by these violations has the right to submit a lawsuit to the Resolution Committee to claim compensation for damages, provided a complaint is first submitted to the CMA.
The General Secretariat stated that any affected individual can file an individual or collective lawsuit against the violations, with the opportunity for other impacted investors to join a class action suit by submitting a request to the committee. The committee will announce on its website when a class action suit is registered, allowing other investors affected by the same violations to view the trading history and securities involved. This process aims to provide affected investors with a means to seek compensation for losses incurred as a result of the illegal activities carried out by the convicts.
The penalties imposed by the CMA highlight the seriousness with which violations of the Capital Market Law are treated in Saudi Arabia. The authority’s efforts to enforce regulations and ensure market integrity are crucial for maintaining investor confidence and safeguarding the interests of all market participants. By holding individuals accountable for their unlawful actions and requiring them to repay illegal gains, the CMA is sending a strong message that manipulation and fraud will not be tolerated in the Saudi capital market.
Investors in the Saudi capital market can rest assured that the CMA is actively monitoring and addressing any violations or misconduct that may occur. The authority’s commitment to upholding the integrity of the market and protecting investors is reflected in its swift actions to investigate and penalize those found guilty of wrongdoing. This proactive approach serves to maintain a fair and transparent trading environment, where investors can have confidence in the regulatory mechanisms that are in place to safeguard their investments.
Moving forward, the CMA is likely to continue its efforts to detect and deter market abuses, ensuring that all participants adhere to the highest standards of conduct. By imposing significant fines and requiring the repayment of illegal gains, the authority is demonstrating its resolve to maintain a level playing field for all investors. This commitment to enforcing regulations and holding violators accountable is essential for fostering trust and stability in the Saudi capital market, ultimately benefiting both individual investors and the broader economy.
