FSB refers price manipulation probe in Nexttvest, Brimstone shares to prosecutor
The Financial Services Board (FSB) has referred its inspection report into price manipulative transactions involving the shares of Nexttvest Holdings Limited and Brimstone Investment Corporation Limited to the National Prosecuting Authority (NPA).
FSB spokesperson Russel Michaels says late last year the Registrar of Stock Exchanges inspected certain individuals to determine whether they had contravened section 40 of the Stock Exchanges Control Act, 1985. Section 40 prohibits, among others, any transaction including a bear sale, with the intention of influencing or manipulating the price of listed securities.
“The inspections follow enquiries by the Surveillance Department of the JSE Securities Exchange into what was perceived to be unusual transactions in Nexttwest and Brimstone shares.
“In the Brimstone probe the trader was fined R25 000 for contravening the JSE’s rules and directives.
“After considering the inspection reports and responses from the affected parties, the investigations into the two entities were referred to the National Prosecuting Authority for further investigation and possible prosecution.
Michaels added that although the statement is made in the interests of transparency, neither the FSB, nor the office of the NPA is entitled to give more information or comment on these issues.
“The FSB will also not speculate whether, or not the NPA will prosecute or not and interested parties are asked not to contact the FSB or the NPA while the matter is under investigation.”
Note to editors
In terms of Section 40 of the Stock Exchanges Control Act, 1985 no one shall:
By means of any statement, promise, forecast or any other action which he knows to be misleading or which is likely to be misleading induce any other person to buy or sell listed securities; or
Directly or indirectly, whether within or outside a stock exchange, by means of the creation of fictitious transactions or the spreading of false reports attempt to stimulate activities or influence or manipulate the prices of listed securities; or
Enter into any transaction, including a bear sale, with the intention of influencing or manipulating the price of listed securities.