Tribunal confirms FSCA insider trading finding against former Steinhoff CEO Markus Jooste

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Investors who lost out in Steinhoff's share price plunge have started to vote on a multibillion-rand settlement proposal.
Investors who lost out in Steinhoff's share price plunge have started to vote on a multibillion-rand settlement proposal.
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  • An FSCA finding that former Steinhoff CEO Markus Jooste contravened the Financial Markets Act by encouraging the trade of Steinhoff shares while he had inside information regarding the company has been confirmed.
  • In a statement on Wednesday, the FSCA said that it welcomed the decision. The Tribunal has referred the determination of an appropriate penalty to the FSCA.
  • However, the administrative penalty against Ocsan Investment Enterprises over a warning SMS regarding Steinhoff's shares was set aside.

The Financial Services Tribunal has confirmed a finding by the Financial Sector Conduct Authority (FSCA) that former Steinhoff CEO Markus Jooste contravened the Financial Markets Act by encouraging the trade of Steinhoff shares while he had inside information regarding the company.

In a statement on Wednesday, the FSCA said that it welcomed the decision. The Tribunal has referred the determination of an appropriate penalty to the FSCA, it said.

"The Tribunal has confirmed the decision of the FSCA that Markus Jooste contravened section 78(5) of the Financial Markets Act in that he encouraged persons to trade in Steinhoff shares whilst he was in possession of inside information regarding Steinhoff.

"The Financial Services Tribunal has, however, referred the determination of an appropriate penalty to the FSCA for consideration with reference to its findings concerning the basis on which the administrative penalty was calculated," the statement said.

In its statement, the FSCA also noted the Financial Services Tribunal's dismissal of its finding against Ocsan Investment Enterprises.

Ocsan had been slapped with a R115 million fine for insider trading in terms of the Financial Markets Act in November. This emanated from a "warning SMS" sent to persons of interest before Steinhoff's shares tanked.

The tribunal found that the content of the SMS sent was not sufficiently specific or precise to qualify as inside information as envisaged by the Financial Markets Act.

"Thus, the administrative penalty against Ocsan was set aside. Consequently, Jooste was also found not to have contravened section 78(4) of the Financial Markets Act in respect of trades by certain other persons," the statement said.

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