Bruce Whitfield
The JSE Securities Exchange has found sufficient evidence to warrant an investigation by the Financial Services Board (FSB) into insider trading at listed furniture retailer Profurn. It has handed its file containing the outcome of its own probe into the allegations to the FSB, but it could take several months before shareholders discover whether any legal action will be taken.
The JSE immediately launched an investigation into share trades involving Profurn last Thursday, after the share price halved in a single morning ahead of a profit warning released on the Stock Exchange News Service early that afternoon.
The Profurn case is just one of 26 currently under investigation by the FSB, which says it is trying to clear the backlog. It has investigated 110 cases of suspected insider trading, and has closed more than half of those because there was insufficient evidence. Nine have been settled, and legal action has been taken in six cases.
The JSE Securities Exchange does not have the authority to question members of the public about share trades, and after discovering suspicious transactions, hands the matter to the FSB, which is able to subpoena anyone it believes may have been involved in insider trading.
The Profurn file has been added to the board’s “to do” list and FSB’s Rob Barrow says they will deal with it when they can.