15 violators of financial market regulations were convicted and fined 10.7 million riyals
Decisive decisions from the Capital Market Authority
announced The Saudi Capital Market Authority (CMA) the issuance of two final rulings by the Appeals Committee for Securities Disputes, convicting 15 individuals of violating the Capital Market Law. This decisive step comes as part of the CMA's ongoing efforts to protect investors and ensure fair trading. These rulings resulted in fines exceeding SAR 10.7 million, in addition to obligating the convicted individuals and other investors to return sums exceeding SAR 12 million in illicit gains.
Details of violations and stock manipulation
The Authority explained that the first conviction involved violating Article 49 of the Capital Market Law and Article 2 of the Market Conduct Regulations. The convicted individuals were involved in placing buy orders with the aim of influencing the share prices of listed companies, and linking these orders to sell orders during the period from August 30, 2021, to July 6, 2022. These practices constituted manipulation and fraud, creating a misleading and false impression regarding the value of the securities. In the second ruling, an individual was convicted of violating Article 31 for engaging in portfolio management activities without obtaining an official license from the Authority.
Deterrent penalties for those convicted
The penalties imposed included varying fines totaling more than 10.7 million riyals. Thirteen defendants were ordered to pay more than 6.7 million riyals, and other investors were ordered to pay more than 5.5 million riyals for the illicit gains realized in their portfolios. As a further deterrent, the committee decided to prohibit the convicted individual, Khalid bin Ibrahim Al-Juraibi, from trading directly or indirectly in the financial market, and to ban him from practicing brokerage, portfolio management, or working as an investment advisor for a period of five years.
Historical context and the regulatory role of the authority
The Saudi Capital Market Authority (CMA) was established to regulate and develop the Saudi Stock Exchange (Tadawul) and provide a safe, transparent, and fair investment environment. Historically, the CMA has been committed to updating its regulations and implementing strict penalties to curb financial manipulation. These measures are part of the Financial Sector Development Program, a key component of Saudi Vision 2030, which aims to build an advanced capital market that attracts both local and international investments.
The expected impact of the decisions locally and internationally
This event is of paramount importance on several levels. Locally, this decisive decision reinforces the confidence of individual and institutional investors in the integrity of the Saudi market and confirms that regulatory authorities are vigilant against any violations. Regionally and internationally, this measure solidifies Tadawul's position as the largest and most important financial market in the Middle East and sends a reassuring message to foreign investors that the Saudi market is subject to rigorous oversight that protects capital from unfair or misleading practices, thus contributing to increased foreign investment inflows.
Investors' rights and claims for compensation
On the other hand, the General Secretariat of the Committees for the Resolution of Securities Disputes affirmed the right of those affected to file individual or collective lawsuits seeking compensation for damages resulting from these violations. Those who entered into agreements with individuals convicted in cases of unlicensed management also have the right to demand the termination of the contract and the return of funds. The Authority called on those affected to submit formal complaints through its website, in preparation for joining the collective lawsuits that will be announced later, thus facilitating litigation procedures and ensuring the recovery of rights for their owners.
