A leaky sieve
Why are there very few prosecutions for insider trading in SA?
Is that because it is not commonplace, as the JSE maintains, or is it because information sharing is too subtle to be detected or controlled?
For a stock exchange that traded, on average, 252m shares a day in 2016, you might have expected that more than seven cases of insider trading — none of which has yet resulted in referrals for prosecution — would have reached the Financial Services Board (FSB) last year. In fact, since 1999, the FSB has investigated only 297 cases of insider trading, 49 of price manipulation, and 33 of false reporting. And in those 18 years only five people have been criminally prosecuted for trading on information they shouldn’t have. Does that mean listed SA companies, hedge funds, fund managers and stock brokers are a tight-lipped and virtuous lot? Or are our regulators simply not on top of things?While technically, this doesn’t count as insider trading, the “off-book” nature of the trade would mean any short sellers of M&R stock would have had no warning — and this may explain the big share price squeeze. Then there’s the case of Peter Armitage’s financial services outfit, Anchor Group. Though i...
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