• The Financial Sector Conduct Authority will by Friday make a decision on its investigation into insider trading at Steinhoff.
  • Four parties have been investigated since 2018.
  • While disgraced former CEO Markus Jooste was at the centre of these allegations, he may not “necessarily” be among the accused.
  • For more articles, go to www.businessinsider.co.za

The Financial Sector Conduct Authority (FSCA) will by Friday make a decision on its investigation into insider trading at Steinhoff. A public announcement is expected in the next week or two.

In 2018, the FSCA launched an investigating into seven parties who were accused of insider trading in Steinhoff shares from September to December 2017. Of particular interest was a flurry of trades ahead of the announcement that CEO Markus Jooste would step down. Some R1.7 billion was traded ahead of the news, Reuters reported.

In April last year, the FSCA found there was no evidence of insider trading in three of these accounts.

At the time it said that it was continuing with an investigation into the four other accounts.

“Big numbers” are involved, says the head of investigation and enforcement at the FSCA, Brandon Topham. 

Jooste is at the centre of the Steinhoff scandal – not only amid accusations that he was involved in false financial reporting but also after allegations of insider trading.

Previously, Bloomberg reported that Jooste sent cellphone messages to his friends advising them to sell their Steinhoff shares – days before the share imploded.  

But Topham says the potential decision to pursue insider trading cases won’t necessarily include Jooste. “I’m not saying it's Markus Jooste.”  

Steinhoff is also being investigated for false and misleading reporting in its financial statements released 2015, 2016 and 2017, and Topham says the deadline for the FSCA to finalise its case is the end of the year.

But he is “beginning to worry” that the FSCA will miss this deadline.

If found guilty, offenders may have to pay back the amount of money they made – or the losses they avoided – in the suspect deals plus a penalty of up to three times that amount, plus R1 million and investigations costs. The money will be paid to people who were on the losing end of those transactions.

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