Capital Market Authority refers 25 suspects to prosecutor amid stock market violations

Saudi Arabia’s financial watchdog has referred 25 suspects to the Kingdom’s public prosecutor after the share prices of 84 listed companies were manipulated.

The Capital Market Authority revealed the offenses go back as far as 2019, and involved purchase orders aimed at influencing the share and unit values of a range of firms, including Saudi Real Estate Co., Red Sea International Co., and Bupa Arabia for Cooperative Insurance Co.

In a statement, the authority said the identities of those found guilty would be published on the website of the General Secretariat of Committees for Resolution of Securities Disputes when the final decisions are issued.

“Any person affected by these violations is entitled to file a compensation claim, after conviction, against the violators before the Committee for the Resolution of Securities Disputes, provided that these claims are preceded by a complaint filed to the CMA,” said the statement.

Other companies named as being affected include Al-Jouf Agricultural Development Co., Saudi Printing and Packaging Co., and Nayifat Finance Co.

Expanding on the incidents, the CMA said 23 suspects were referred for “carrying out practices that involve manipulative and deceptive acts through the entry of purchase orders that aim to influence the share price and unit price” during trading on shares of 72 listed companies on the Saudi Stock Exchange and one of the investment funds. Some of these are related to sell orders.

The second referral involves two suspects for carrying out practices that “aim to effect a high closing auction price during trading on shares and units of 26 companies” – one of which was listed on the parallel market Nomu, and one of the investment funds on the Saudi Stock Exchange.

The announcement comes as Saudi Arabia seeks to continue developing its stock exchange offerings in line with the Vision 2030 initiative to diversify its economy.

Speaking at an event in London on Sept. 11, the CMA chairman Mohammed El-Kuwaiz revealed there are around 140 firms at various stages of the listing process.

“If we project going forward, we actually still have a decent pipeline coming up, and it’s very much a reflection of having the stability, (as) having things as they are continuously attracts businesses,” he said, adding that there are 19 businesses approved to list by the CMA, with around another 50 having applied.

“The last horizon is we periodically query the financial advisor network for the number of mandates they’ve signed, which gives us a further indication of the pipeline we expect, and that number is close to 70 signed mandates,” El-Kuwaiz added.