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Title: Misleading Practices
Date Publish
30 June 2013
As Capital Markets Authority (the Authority) seeks to enhance legal awareness of brokers and investors and protect all those engaged in securities business from committing violations that result in certain penalties arising out of misleading practices, the Authority draws the attention of brokers and officers of online trading companies to exercise highest degree of caution when dealing in and trading a single stock only, which may allow a room for manipulation that in turn would result in applying the provisions of Article (122) of Law (7) of 2010 concerning the Establishment of the Capital Markets Authority and Regulating of Securities Activity.
Therefore, the Authority hereby advises the dealers of penalties resulting from unlawful practices set forth in the said Article, i.e. imprisonment for five years maximum, and minimum of KD 10,000 or maximum of KD 100,000 fine, or either penalty for any person who:
- Performs any act involving creation of false impression or misleads people concerning transaction of securities or securities exchange market through:
- entry into a deal in a manner that does not really change the securities ownership;
- involves purchasing and selling of securities while that person is aware that something similar to volume, price and time of securities in question issued or will be issued by the same person or other persons coordinating with him.
- Any person who enters into one or more securities deals to:
- increase price of securities for the same issuer with the intention of persuading others to purchase;
decrease price of the securities for the same issuer with theintention of persuading others to purchase;
- create real or imaginary transaction with the intention of persuading others to purchase or sell.
Capital Markets Authority kindly requests all dealers, traders and brokers to avoid any form of misleading practices set forth in the Law in order to avoid any penalty and avert any liability for any conducting in breach of the Law.
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