Sunday, October 17, 2010

Saudi Capital Markets Authority Levies Fines and Penalties in Excess of SAR102 Million

On 12 October the Saudi Capital Markets Authority levied another set of record fines and penalties but not as high as its all time record of SAR278 million last January.  If you look closely, you'll see that many of those cited today were also involved in that fine.

The CMA levied SAR800,000 in fines and SAR99,434,098.10 in penalties (disgorgement of illegal gains) against seven individuals (two of whom were apparently not involved in illegal activity but received gains from that activity).  The fines and penalties concern trading in the shares of Al Baha Investment and Development Company between 23 July 2006 and 27 September 2006 as follows:

A.  Mr. Jarrallah Bin Muhammad Bin Nassir Al-Jarrallah
  1. Return of SAR28,923,826.57 in illegal trading earnings on the trading.
  2. A fine of SAR 300,000.
  3. Prohibition from purchasing traded shares for seven years.
  4. Prohibition from working in a securities firm for seven years.
  5. Prohibition from acting as a broker, portfolio manager or investment advisor for seven years.

B.  Messrs. Sa'id Bin Muhammad Bin Nassir Al-Jarrallah, Fa'iz Bin Salih Bin Abdullah Bin Mahfouz, Nabil Bin Mu'id Bin Yahya AlQahtani
  1. Sai'd to return illegal trading gains of SAR2,119,935.00
  2. Nabil to return illegal trading gains of SAR24,896,213.23
  3. Each of the three of them fined SAR100,000.
  4. Prohibition from purchasing traded shares for five years.
  5. Prohibition from working in a securities firm for five years.
  6. Prohibition from acting as a broker, portfolio manager or investment advisor for five years.
C.  Mr. Abdulrahman Bin Abdulmuhsin Bin Sulayman AlMoajil
  1. A fine of SAR200,000.
  2. Prohibition from purchasing traded shares for five years.
  3. Prohibition from working in a securities firm for five years.
  4. Prohibition from acting as a broker, portfolio manager or investment advisor for seven years.
D.  Mr. Muhammad Bin Nasser Bin Jarallah Al-Jarallah
  1. Return of illegal trading gains in his account of SAR38,293,835 caused by actions of Jarallah, Said and Fa'iz.   No fine as he apparently was not involved in the activities just a beneficiary.
E.  Mr. Nasser Bin Muhammad Bin Nasser Al-Jarallah
  1. Return of illegal trading gains in his account of SAR5,200,288.30.  Like Mr. Muhammad immediately above, a fine was not levied against him, presumably because he was not involved in the illegal activities.
I'm guessing our friends above just didn't trade two stocks back in 2006 so we may be seeing more enforcement actions from the Saudi CMA.

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