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Saudi investors fined $1m for insider trading

Mohammed El-Kuwaiz, chairman of Saudi Arabia's Capital Market Authority Reuters/Nael Shyoukhi
Mohammed El-Kuwaiz, chairman of Saudi Arabia's Capital Market Authority
  • Five investors charged
  • Compensation could follow
  • Anti-graft campaign launched in 2017

Saudi financial authorities have fined five investors and one company almost SAR5 million ($1.3 million) for insider trading and other capital market law violations, the latest in a series of crackdowns on corruption in the kingdom. 

The investors and the company, Erada and Riyada for Development and Commercial Investment, committed crimes including buying shares of a company before an affiliate announced a Covid vaccine distribution agreement, attempting to influence share prices through purchase orders, and offering advisory services without a licence. 

They were ordered to pay SAR4 million in fines and SAR0.8 million to cover the financial gains made due to the violations, which took place between 2018 and 2021.



Of the SAR4 million in fines, one investor alone was ordered to pay SAR2.8 million. 

The Capital Market Authority said in a statement on May 23 that the violators could be subject to individual or class action claims for compensation. 

Saudi authorities have been on a drive to stamp out corruption, including in its financial markets, as the country implements its Vision 2030 to diversify its revenue base. The plan includes regulatory reforms to attract investors to its debt and derivative markets.

An anti-corruption agency called the Oversight and Anti-Corruption Authority – known as Nazaha – has ramped up its operations since the government launched a major anti-graft campaign in 2017. 

In January the head of the Royal Commission for AlUla, a flagship tourism project in northwest Saudi Arabia, was arrested over corruption by the Oversight and Anti-Corruption Authority for “abuse of influence and money laundering”. 

A whistleblower law was approved in February offering protection for reporting suspected cases, though critics say more assurances are needed.

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