Saudi firm's head jailed for insider trading
Riyadh, August 18, 2009
A Saudi Arabian financial court has taken the unprecedented step of jailing a violator of stock market regulations, after the chairman of Bishah Agricultural Development Co was found guilty of insider trading.
According to a statement published on the Capital Market Authority's (CMA) website, the Committee for the Resolution of Securities Disputes (CRSD) has issued a final verdict against Najm-Eddine Ahmad Najm-Eddine Dhafer, jailing him for three months.
The CRSD's ruling found Dhafer "guilty of insider trading in Bishah shares based on him being the chairman of the company's board", CMA said.
Attempts by Reuters to contact Dhafer were unsuccessful. It was unclear as to whether he was in custody.
According to the CMA website, a decision by the CRSD may be appealed to the Appeal Panel within 30 days of the notification date. It was not immediately clear if Dhafer would be allowed to appeal CRSD's ruling.
Market watchers said the decision was a first. "Never before has someone been jailed for violating stock market regulations in Saudi Arabia," said Abdulhamid Al-Amri, a member of the Saudi Economic Association, a semi-official think-tank.
"This is unprecedented, but very positive," said Ibrahim al-Alwan, deputy chief executive of KSB Capital, a local investment bank.
Dhafer was also fined 100,000 riyals ($26,667) and was ordered to pay the CMA the 52,690 riyals the watchdog said he made in profits from trading in Bishah's shares. Bishah was involved in processing dates, trading cereal seeds and manufacturing agricultural equipment.
CMA's head Abdul-Rahman Al-Tuwaijri could not be reached for comment. -Reuters