Jooste's insider trading fine slashed
A fine against former Steinhoff CEO Markus Jooste for insider trading has been cut by almost 90% after a local tribunal set aside the original penalty.
The Financial Sector Conduct Authority (FSCA) has issued a revised penalty of R20.5m against Jooste, down from the R162m announced in October 2020, it said in a statement yesterday.
The FSCA said this is for breaching section 78 (5) of the Financial Markets Act 19 of 2012 (the Financial Markets Act).
Jooste had advised several people by SMS to sell their Steinhoff shares, just days before the company alerted shareholders to its accounting irregularities and that he had quit which caused its shares to crash.
Moneyweb reports that the FSCA said R1m of the penalty was levied for Jooste encouraging PSG founder and director Jaap du Toit to sell his Steinhoff shares, even though Du Toit never acted on the warning.
‘The provision prohibits an insider from encouraging or discouraging another person to deal in securities which the inside information relates to,’ it explained.
On 29 October 2020, the FSCA imposed a R161 568 068 administrative penalty on Jooste for breaching section 78 (4) (a) and section 78 (5) of the Financial Markets Act.
However, 14 months later, the Financial Sector Tribunal set this penalty aside.
Moneyweb reports that section 78 (4) (a) of the Financial Markets Act prohibits an insider from disclosing inside information to another person; the tribunal found that Jooste had not contravened this rule, as the information he provided via SMS to Du Toit, Dr Gerhardus Burger, Marthinus Swiegelaar and the late Ockert Oosthuizen ‘was vague and imprecise.’
The FSCA says the penalty is payable on/before 6 January 2023.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
