The Capital Market Authority (CMA) has announced that the Appeal Committee for Resolution of Securities Disputes (ACRSD) has issued a final ruling in the Mohammad Al-Mojil Group Company case, requiring three respondents to pay SR90.8 million to 668 investors who joined the registered class action lawsuit. The ruling was made in relation to incorrect company announcements that led to investor losses.
The final decision was made after the case was referred back to the Committee for Resolution of Securities Disputes (CRSD) to review a petition submitted by one of the respondents. The CRSD issued its decision on March 13, 2025, which became final on April 22, 2025, according to the ACRSD.
Background of the Mohammad Al-Mojil Group Company Case
The case against Mohammad Al-Mojil Group Company relates to misleading financial statements issued by the company on February 22 and April 21, 2012. These statements covered the company’s 2011 annual results and Q1 2012 results, respectively, and were later found to be incorrect.
The incorrect financial statements were revealed on September 22, 2012, when the company announced its Q2 2012 results, showing discrepancies that created a false impression of the company’s financial position. This announcement led to a significant impact on investors who had relied on the earlier statements.
Compensation and Penalties in Securities Disputes
The ACRSD ruling obligates Adel bin Mohammad bin Hamad Almojil, Fahad bin Ali bin Saad Alraqttan, and Ibrahim Zadah to compensate the affected investors, based on entitlements determined by the CRSD and upheld by the appeals committee. The compensation amount of SR90.8 million is to be paid jointly and individually by the three respondents.
The CMA emphasized its continued efforts to detect violations, enforce penalties, and facilitate compensation claims for those harmed by misconduct. The authority reiterated the importance of safeguarding investor confidence and maintaining a fair, transparent market.
Impact on Investor Confidence
The CMA’s actions in the Mohammad Al-Mojil Group Company case demonstrate its commitment to protecting investors and maintaining market integrity. The class action lawsuit and subsequent ruling highlight the importance of accurate financial reporting and the consequences of misleading investors.
According to the CMA, the authority will continue to monitor the market and take enforcement action against any violations. The CMA’s efforts aim to ensure a safe and trustworthy investment environment for all investors.
The next step in the process is expected to be the distribution of the compensation amount to the affected investors. The CMA is likely to oversee this process to ensure that the investors receive their entitled compensation. However, the exact timeline for the distribution is not certain, and investors will need to wait for further announcements from the CMA.
As the situation develops, investors and market observers will be watching for any further updates on the case and its implications for the securities market. The outcome of this case may also have implications for future class action lawsuits and the enforcement of securities regulations in the country.
