Wednesday, January 19

Markus Jooste loses key part of appeal against FSCA insider trading fine


The Financial Services Court has upheld one of the key rulings of the Financial Sector Conduct Authority (FSCA) against the disgraced former Steinhoff International Holdings CEO Markus Jooste regarding insider trading and infringement of the Financial Markets Law.

However, the court dismissed another FSCA-related decision involving Ocsan Investment Enterprises and, consequently, against Jooste.

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This was confirmed in a short statement from the FSCA on the matter on Wednesday afternoon. The financial watchdog did not give any indication on how the court’s decision would affect the authority’s fines of around R241 million against Jooste and three other people that were announced in October last year.

Read:
The FSCA fines Markus Jooste and three other people around R241 million
Jooste can evade FSCA’s R161.6m fine for a while yet

FSCA alleged violations of Section 78 (1), Section 78 (4) (a), and Section 78 (5) of the Financial Markets Act (19 of 2012) at that time. However, Jooste and Ocsan Investment Enterprises (controlled by Jooste’s longtime acquaintance, the late Ockie Oosthuizen) later appealed the sentences and fines from the FSCA.

It’s part of a much more complex investigation by the authority on the Steinhoff corporate scandal.

“The FSCA takes note of the decision of the Financial Services Court … regarding insider trading infringements with respect to the shares of Steinhoff International Holdings NV,” the financial regulator said in its statement.

“The court has upheld the FSCA’s decision that Mr. Markus Jooste violated Section 78 (5) of the Financial Markets Act by encouraging individuals to trade Steinhoff stock while he was in possession of inside information about Steinhoff “added the FSCA. .

“However, the court has forwarded the determination of an appropriate sanction to the FSCA for consideration with reference to its conclusions on the basis on which the administrative sanction was calculated,” the authority further noted.

“The court dismissed the FSCA finding that Ocsan Investment Enterprises … through its former director was dealing with inside information in contravention of section 78 (1) of the Financial Markets Act, stating that the content of the SMS sent it was not specific or precise enough to qualify as inside information as provided for by the Financial Markets Law, ”noted the FSCA.

“Thus, the administrative sanction against Ocsan was annulled. Consequently, it was also determined that Mr. Jooste had not violated Section 78 (4) of the Financial Markets Act with respect to the transactions of some other persons, ”added the watchdog.

From the FSCA statement, it is clear that Jooste still faces a hefty fine for violating at least part of the Financial Markets Act.

Jooste’s initial share of the FSCA fine amounted to around R161.6 million.

It is the largest insider trading penalty imposed by the FSCA, eclipsing the previous record of R24 million imposed on Deutsche Bank in 2019.


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