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Category:
Insurance
News /
Regulatory
Bodies
/ October 2006
Report by the Directorate of Market Abuse
The
DMA (Directorate of Market Abuse) held its 3rd meeting at the FSB
(Financial Services Board) on 10 October 2006.
The
Insider Trading Act came into operation on 17 January 1999. This Act created the ITD (Insider Trading Directorate) that had a
mandate to investigate alleged cases of insider trading, and in
appropriate circumstances, take civil legal action against
offenders.
On
1 February 2005 the Insider Trading Act was incorporated into
the Securities Services Act. In terms of this Act a new directorate
called the DMA (Directorate of Market Abuse) was created which
replaced the ITD. Unlike its predecessor which only dealt with
insider trading, the DMA is responsible for investigating and taking
enforcement action in all cases of financial market abuse.
Since 1 February 2005, the DMA has been investigating cases of
insider trading, prohibited trading practices (market manipulation)
and false, misleading or deceptive statements (false reporting),
made in respect of listed securities.
The
DMA can refer cases of insider trading to the Enforcement Committee
or take civil legal action against an alleged offender.
In
such cases the civil court or the Enforcement Committee may order
that the alleged offender pay the profit made, or the losses
avoided, as a result of the offending transactions, to the FSB, and
a penalty of up to three times such amount. These funds are
distributed, after recovery of costs, to persons who may have been
prejudiced by the offending transactions.
Market manipulation and false reporting cases can be referred to the
Enforcement Committee that can impose a penalty and a cost order on
the alleged offender.
In
addition market abuse transgressions are criminal offences in terms
of the Act. The Director of Public Prosecutions may institute
criminal action against any person. It is not the function of the
DMA to institute criminal prosecutions but would provide all
information necessary to assist the Director of Public Prosecutions.
Below is a list detailing the current status of insider trading and
market manipulation investigations. It should be noted that these
investigations are not into the affairs of the companies listed but
into trading in shares on the stock exchange.
Possible insider trading cases
|
Security |
JSE Code |
Case status |
|
1.
Brimstone Investment Corporation Limited (1) |
BRT |
Ongoing |
|
2.
Capital Alliance Holdings Limited |
CPT |
Closed |
|
3.
CS Computer Services Holdings Limited |
CSH |
Closed |
|
4.
Excellerate Holdings Limited |
EXL |
Closed |
|
5.
Freestone Property Holdings Limited |
FSP |
Closed |
|
6.
Moribo Leisure Limited |
MRB |
Ongoing |
|
7.
Omega Alpha International Info Technology Holdings
Limited |
OAI |
Handed over to the Prosecuting Authorities |
|
8.
Peregrine Holdings Limited |
PGR |
Ongoing |
|
9.
Redefine Income Fund Limited |
RDF |
Closed |
|
10.
Sempres International Technology Holdings Limited |
SEM |
Handed over to the Prosecuting Authorities |
|
11.
Spescom Limited |
SPS |
Ongoing |
|
12.
VenFin Limited |
VNF |
Closed |
|
13.
Verimark Holdings Limited |
VMK |
Ongoing |
|
14.
White Maize Futures (3) |
White Maize (3) |
Ongoing |
Possible market manipulation cases
|
Security |
JSE Code |
Case status |
|
1.
ACC-ROSS |
Acc-Ross |
Closed |
|
2.
Newrand Index Warrant |
NRD |
Ongoing |
Investigations are "closed" once it becomes evident that no, or
insufficient evidence has been obtained to warrant action in terms
of the Act.
Four cases of possible false reporting are under investigation.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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