South Africa’s Financial Services Board (FSB), the watchdog of the financial services industry, currently has six criminal cases of insider trading in the pipeline and its first two criminal convictions are on the horizon, according to CEO Jeff van Rooyen.
Speaking on the second day of the Islamic Finance and Investment conference in Cape Town on Tuesday, Van Rooyen said that since it first began investigating insider trading cases in 1999, the FSB had completed 139 investigations and another 13 were outstanding.
No-one has yet been successfully convicted of criminal wrongdoing in an insider trading case, although the FSB has achieved 17 civil settlements involving fines of some R23,4-million.
“The possibility of civil settlements, where individuals are not obliged to admit their guilt, creates a perception of business as usual in the markets,” he observed.
“But the new Security Services Bill will strengthen the FSB’s capacity to prosecute cases and levy fines.”
Under South African law those convicted of insider trading face fines of up R50-million or imprisonment of up to ten years.
While not elaborating on the specific criminal cases, Van Rooyen said the FSB’s first two criminal convictions were “on the horizon” and there were six cases pending in civil court.
He expects the new Security Services Bill and Financial Reporting Bill (which makes international accounting practices mandatory for companies and provides for enforcement by the FSB) to be promulgated early in 2004. – I-Net Bridge