Imprisonment penalties and a fine of 4.85 million riyals for violating Saudi stock manipulation

​Riyadh – Mubasher: The General Secretariat of the Committees for Resolution of Securities Disputes announced the issuance of the Appeal Committee for Securities Disputes’ peremptory decision No. 2860/LS/2023 AD for the year 1444 AH; This is in the general criminal lawsuit filed by the Public Prosecution (and referred to it by the Capital Market Authority) against Muhammad bin Abdullah bin Ibrahim Al-Muqbel.

The operative part of the decision, according to a statement by the General Secretariat of the Committees for Resolution of Securities Disputes, ended with convicting the aforementioned of violating Article Thirty-One of the Capital Market Law and Article Five of the Securities Business Regulations. For carrying out a securities business represented in the activity of (management), by managing investment portfolios for a number of investors without obtaining a license from the Capital Market Authority.

He was also convicted, according to the statement, of violating Article 49 of the Capital Market Law and Article 2 of the Market Conduct Regulations, when trading the shares of the following companies: Basic Chemical Industries Company (BCI), Fitaihi Holding Group Company (Fitaihi Group), and Company The Mediterranean and Gulf Insurance Company (MedGulf Insurance), SABB Takaful Company (SABB Takaful), Al Andalus Real Estate Company (Al Andalus), Saudi Enaya Cooperative Insurance Company (Enaya), Electrical Industries Company (Electrical Industries), Saudi Clay Pipe Production Company (Pottery), And Zahrat Al-Waha Trading Company (Al-Waha), and the Arab Cooperative Insurance Company (Arab Insurance), during the period from February 10, 2020 to September 16, 2020.

These behaviors and practices constituted manipulation and fraud, and created a misleading and incorrect impression regarding the securities of the aforementioned companies, as his violation was represented in his entering through the investment portfolios he manages for a number of investors to enter purchase orders with the aim of influencing the share price, and entering purchase orders with the aim of achieving an auction price. High close.

The decision of the Appeal Committee included imposing a number of penalties on him. It included imprisonment for a period of 3 months, imposing a fine of 4.85 million riyals on him, and preventing him from trading in the Saudi financial market, directly or indirectly, with the exception of trading through investment funds with financial market institutions for a period of 5 years.

It also included penalties; Preventing him from practicing brokerage, managing portfolios, or working as an investment advisor in the Saudi financial market for a period of 5 years, and preventing him from working in entities subject to the supervision of the Capital Market Authority, for a period of 5 years..

The decision also included obligating a number of investors to pay a total amount of 1.54 million riyals to the authority’s account. In exchange for the illegal gains achieved on their investment portfolios, resulting from the violating trades committed by the convicted Mohammed bin Abdullah bin Ibrahim Al-Muqbel.

The Secretariat pointed out that the person affected by the violations of Article 49 of the Capital Market Law, the subject of this case, has the right to submit to the Adjudication Committee an individual or collective claim to claim compensation for the damage from these violations. agreement or contract with the convict to file an individual or collective action with the Committee to demand the termination of the agreement or contract and the recovery of any money or other property he paid or transferred under the agreement or contract as stipulated in Paragraph (b) of Article 60 of the Capital Market Law, provided that the So submit a complaint to the Capital Market Authority in this regard.

The General Secretariat of the adjudication committees indicated that it will announce to the public on its website when any class action lawsuit is registered. In order for the rest of the investors affected by the same violations to apply to the Committee to join the class action lawsuit.

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