The Financial Sector Conduct Authority (FSCA) is investigating 75 instances of possible contraventions of SA’s laws governing financial market abuse, all of which relate to listed securities.
The investigations include false and misleading statements involving Steinhoff and Tongaat Hulett securities as well as a price manipulation and an insider trading matter involving the securities of cement maker PPC. Ayo Technology Solutions is another listed entity whose securities are under investigation by the FSCA.
“At the moment we have 75 registered cases of which 42 are ongoing — they’ve been allocated and are being investigated currently,” Alex Pascoe, who heads up the FSCA’s market abuse investigation team, told Business Day in an interview. We’ve got 33 that are registered but are still to be investigated. We’re not investigating the companies — we investigate the securities within these companies. They are listed securities as per the FMA [Financial Markets Act].”
All but one of the 75 open cases involve securities listed on the JSE and cover possible insider trading, prohibited trading practices such as price manipulation and providing false or misleading statements. The remaining case involves a security listed on one of SA’s two smaller exchanges — A2X or the Cape Town Stock Exchange — though Pascoe declined to say which of these two alternate market trading platforms the security is listed on.
“We do have another investigation that sits on another exchange,” he said without giving further detail.
Nevertheless, Pascoe said the JSE had a “very sophisticated” surveillance system that was highly regarded internationally.
“We’ve had dual-listed cases that have come from the US and the SEC [Securities and Exchange Commission] have come out here with the FBI and they just can’t believe the depth and the information that’s available...not only to us but to the surveillance team,” he said. “It’s a well-regarded surveillance system.”
The FSCA initially imposed a penalty of R1.5bn on Steinhoff for breaches of section 81 of the FMA though that was later remitted to an administrative penalty of R53m. The regulator also initially slapped Steinhoff’s former CEO Markus Jooste with a R161.6m fine for breaches of sections of the FMA but later revised that to an administrative penalty of R20m.
Pascoe said the FSCA still intended pursuing investigations into individuals linked to Steinhoff who were allegedly involved in making false statements related to the company.
“We are still going to investigate those who were responsible for issuing such statements knowing that they were false,” he said.
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