FSB probes listed firms for insider trading
November 27, 2009
By Mzwandile Jacks
Price manipulation and insider trading by companies were on the increase in South Africa this year due to the global financial crisis, it was confirmed yesterday.
These observations were made after the directorate of market abuse (DMA) - an arm of the Financial Services Board (FSB) - said it was investigating seven JSE-listed companies for insider trading.
Bert Chanetsa, the deputy executive officer of investment institutions at the FSB, said the DMA was also investigating two possible cases of false or misleading reporting.
He did not release details of those involved in these cases.
Companies under investigation for insider trading were Beige, Jubilee Platinum, Sentula Mining, African Cellular Towers, Stratcorp, Telkom and WBHO.
Gerhard van Deventer, the executive director of the DMA, yesterday said most cases of insider trading usually happened before an important company announcement was to be made.
Imara SP Reid senior analyst Steve Meintjes said the FSB would like to be as active as regulators in countries such as the US.
"Another concern to them is the fact that there have been few prosecutions in this country related to insider trading," Meintjes said.
In the case of Beige Holdings, the AltX-listed leading contract manufacturer, a suspicious transaction happened in March 2007 shortly before the company released a cautionary notice a few days later.
Van Deventer said the DMA was not allowed to release more information about the companies under investigation until legal action was taken.
"Remember we are not investigating the company but we are looking at suspicious transactions in the trading of shares," he said.
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