You are here »   Home »   ∷   Business »

National Treasury puts insider traders on notice

By Anyanzwa James
Updated Sunday, June 16th 2013 at 00:00 GMT +3
Share this story: Share on Linkedin Share on Google Plus Share on Twitter Share on Facebook Share on WhatsApp

Criminal offence

The Capital Markets Act expressly prohibits insider trading and establishes this practice as a criminal offence.

Despite prohibition, there have been few prosecutions. None of these have been successful,  partly due to challenges faced in the prosecution process.

  The Capital Markets Act prohibits insider trading. It  stipulates statutory defenses and sets out the sanctions for insider trading. 

It also gives  licensing, regulation and supervision of all capital markets participants to the CMA.

 The Act also disseminates rules and regulations and is empowered to carry out enforcement and sanctions.

 This was highlighted during the country’s first trials for insider trading in which Bernard Mwangi Kibaru and Terry Davidson were unsuccessfully prosecuted.  These formed the basis of concern over the adequacy of existing insider trading legislation in Kenya.

The two cases of insider trading against Davidson Kibaru were dismissed in 2010 and both cleared of the charges of insider trading.

Chief magistrate Gilbert Mutembei ruled that Mr Kibaru, who had denied charges of instructing Drummond Investment Bank to sell 111,400 Uchumi shares on April 26, 2006 contrary to the CMA Act, was not guilty on the main and alternative charges of irregular trading.

He ruled that the prosecution failed to prove the accused exploited information not generally available to the public that Uchumi was performing poorly when he sold his shares.


 

GO TO PAGE « Prev 1 2
Share this story: Share on Linkedin Share on Google Plus Share on Twitter Share on Facebook Share on WhatsApp