The Appeal Committee for the Resolution of Securities Disputes (ACRSD) issued on 23/01/1432 H. (corres. 29/12/2010 G.) its final decision in the lawsuit filed by the Capital Market Authority (CMA) against Jarallah bin Muhamad bin Nasser Al Jarallah, Saeed bin Muhamad bin Nasser Al Jarallah, Fa’iz bin Saleh bin Abdullah bin Mahfouz and the investor Muhamad bin Nasser bin Jarallah Al Jarallah. When trading in the shares of the National Metal Manufacturing & Casting Company “Maadaniyah”, Jarallah Al Jarallah, Saeed Al Jarallah and Fa’iz bin Mahfouz had violated the rules of share trading during the period from 17/06/2006 G. to 15/07/2006 G. The ruling of ACRSC upheld the decision of the Committee for the Resolution of Securities Disputes (CRSD) convicting the defendants to the charges of violation and imposing fines and sanctions in accordance with the following:
First: Evidence was found affirming that Jarallah bin Muhamad bin Nasser Al Jarallah had violated Article Forty Nine of the Capital Market Law, as well as Article (2) and Article (3) of the Market Conduct Regulations. The following fines and sanctions shall be applied:
1. He shall be obligated to pay to CMA the proceeds he gained as a result of such violations, which amounts (SR. 56,633,207) fifty six million, six hundred thirty three thousand, two hundred and seven Saudi Riyals.
2. Impose a fine on him amounting to (SR. 100,000) one hundred thousand Saudi Riyals.
3. He shall refrain for five years from trading through the purchase of shares in companies listed in the Exchange Market.
4. He shall refrain for five years from working in companies of which their shares are traded in the Exchange Market.
5. He shall refrain for five years from engaging in activities of brokerage and portfolio management, in addition to working as an investment consultant.
Second: Evidence was found affirming that Saeed bin Muhamad bin Nasser Al Jarallah had violated Article Forty Nine of the Capital Market Law, as well as Article (2) and Article (3) of the Market Conduct Regulations. The following fines and sanctions shall be applied:
1. Impose a fine on him amounting to (SR. 100,000) one hundred thousand Saudi Riyals.
2. He shall refrain for five years from trading through the purchase of shares in companies listed in the Exchange Market.
3. He shall refrain for five years from working in companies of which their shares are traded in the Exchange Market.
4. He shall refrain for five years from engaging in activities of brokerage and portfolio management, in addition to working as an investment consultant.
Third: Evidence was found affirming that Fa’iz bin Saleh bin Abdullah bin Mahfouz had been an accomplice in violating Article Forty Nine of the Capital Market Law, as well as para. (a) of Article (11) of the Market Conduct Regulations. The following fines and sanctions shall be applied:
1. Impose a fine on him amounting to (SR. 200,000) two hundred thousand Saudi Riyals.
2. He shall refrain for five years from trading through the purchase of shares in companies listed in the Exchange Market.
3. He shall refrain for five years from working in companies of which their shares are traded in the Exchange Market.
4. He shall refrain for seven years from engaging in activities of brokerage and portfolio management, in addition to working as an investment consultant.
Fourth: Evidence was found affirming that Jarallah bin Muhamad Al Jarallah and Saeed bin Muhamad Al Jarallah had exercised illegal behaviors and acts as to the lawsuit filed regarding the portfolio of their principal investor Muhamad bin Nasser bin Jarallah Al Jarallah, hence obligating the said investor to pay to CMA the profits made from such violating acts his agents committed, which amounts (SR. 103,889,681.26) one hundred three million, eight hundred eighty nine thousand, six hundred eighty one Saudi Riyals, and 26 Halalas.
