Financial Crime World

Saudi Arabia: Five Investors and a Company Convicted for Insider Trading and Market Manipulation, Fined SAR 4.71 Million

May 23, 2024

The Appeal Committee for Resolution of Securities Disputes (ACRSD) in Saudi Arabia recently reached three final decisions, convicting six individuals and a local company for violating the Capital Market Law (CML) and its Implementing Regulations. The defendants were fined a total of SAR 4.02 million and ordered to pay an additional SAR 811.5 thousand for illegal gains.

Insider Trading: Mansour Abothnain

In the first decision, Mansour Farraj Mansour Abothnain was convicted for insider trading:

  • Between May 30 and June 1, 2021
  • Purchased shares in Astra Industrial Group
  • Violated Article (50/b) of the CML
  • Fined SAR 300 thousand
  • Forfeited SAR 163 thousand in illegal gains

Market Manipulation: Abdullah Alzahrani

In the second decision, Abdullah bin Sa’id bin Muhammad Alkhazmary Alzahrani was convicted for attempting to influence share prices and manipulating the market:

  • Between June 24, 2018, and October 11, 2021
  • Involved enterprises such as: Takween Advanced Industries, Middle East Paper, Basic Chemical Industries, Astra Industrial Group, Al Hassan Ghazi Ibrahim Shaker, Bawan, Electrical Industries, Al Yamamah Steel Industries, National Gypsum, Saudi Industrial Development, AYYAN Investment, Saudi Arabian Amiantit, National Metal Manufacturing and Casting, Zamil Industrial Investment, Tanmiah Food, Al-Babtain Power and Telecommunication, Al Abdullatif Industrial Investment, Hail Cement, Saudi Real Estate, Sinad Holding, and Red Sea International
  • Violated Article (49/a) of the CML and Article (2/a) of the Market Conduct Regulations
  • Fined SAR 2.8 million
  • Forfeited SAR 647 thousand in unlawful profits

Unlicensed Securities Business and Insider Trading: Erada and Riyada for Development and Commercial Investment Company and Three Individuals

In the third decision, Erada and Riyada for Development and Commercial Investment Company, Abdulaziz bin Abdullah bin Abdulaziz Abanmi, Salman bin Sa’ad bin Muhammad Almalki, and Musa bin Abdullah bin Bard Alrowaili were found guilty for:

  • Practicing securities business without a license
  • Participating in insider trading
  • Conducted activities under a “Provision of Financial and Administrative Advisory Services Contract” with an investor between October 21, 2019, and October 21, 2020
  • Fined a collective SAR 900 thousand

CMA’s Statement

The Capital Market Authority (CMA) collaborated with regulatory bodies and the public penal lawsuit filed by the Public Prosecution. The decisions highlight the importance of investor trust and transparency, emphasizing their commitment to combating fraud, manipulation, and insider trading.

Compensation Claims

Affected investors have the right to file compensation claims with the Committee for Resolution of Securities Disputes (CRSD) for damages resulting from the violations addressed in the first and second decisions. This can be done individually or as part of a class action. Lawsuits require a CMA complaint and will be publicly announced on the CRSD website if a class action is registered.

For more information, visit the CRSD website: