South Africa

Markus Jooste slapped with R161m FSCA fine for insider trading

DURBAN - The Financial Sector Conduct Authority (FSCA) today imposed an administrative penalty of R161.57 million on former Steinhoff International chief executive Markus Jooste for insider trading in the retailer’s share price.

FSCA said Jooste was found guilty for breaching section 78 (4) (a) and section 78 (5) of the Financial Markets Act, 19 of 2012 (the Financial Markets Act) and the provisions prohibit, respectively, an insider from disclosing inside information and or encouraging or discouraging another person to deal in securities which the inside information relates to.

FSCA divisional head for investigations and enforcement Brandon Topham they issued a total fine of R241m for insider trading related breaches.

“Jooste is solely liable for R122.93m out of the R161.57m and we must stress that Jooste made no financial gain out of the insider trading but he was responsible for the sms he sent to different individuals to sell the Steinhoff shares,” Topham said.

Steinhoff share price later declined by more than 90 percent in early December 2017 after the group admitted to accounting irregularities.

The penalty imposed on Jooste also includes an amount of R1m for disclosing inside information and encouraging Jaap du Toit to sell his Steinhoff shares but du Toit never acted on the contents of the warning SMS.

FSCA also imposed a penalty of R115.87m on Ocsan Investment Enterprises, a company that was controlled by a long-time acquaintance of Jooste, the late Ockie Oosthuizen. The authority said Oosthuizen instructed Ocsan’s sale of Steinhoff shares on November 30, 2017 following receipt of the warning SMS and thus caused Ocsan to breach section 78 (1) of the Financial Markets Act.

The authority also imposed a penalty of R18 328 on Marthinus Swiegelaar for a breach of section 78 (1) of the Financial Markets Act. Swiegelaar was Jooste’s chauffeur at the time of the contravention, and he also received the warning SMS on November 30.

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