Markus Jooste loses key part of appeal against FSCA insider trading fine

Tribunal upholds part of FSCA ruling but dismisses a related ruling against Ocsan Investment Enterprises and consequently against Jooste.
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The Financial Services Tribunal has upheld one of the key rulings by the Financial Sector Conduct Authority (FSCA) against disgraced former Steinhoff International Holdings CEO Markus Jooste in relation to insider trading and contravening the Financial Markets Act.

However, another related FSCA ruling involving Ocsan Investment Enterprises was dismissed by the tribunal, and consequently against Jooste.

This was confirmed in a brief FSCA statement on the matter on Wednesday afternoon.  The financial watchdog gave no indication on how the tribunal’s decision would impact the authority’s fines of around R241 million against Jooste and three other individuals that was announced in October last year.

Read:
FSCA fines Markus Jooste, three others around R241m
Jooste may dodge FSCA’s R161.6m fine for a while yet

The FSCA claimed contraventions of Section 78(1), Section 78 (4) (a) and Section 78 (5) of the Financial Markets Act (19 of 2012) at the time. However, Jooste and Ocsan Investment Enterprises (controlled by Jooste’s long-time acquaintance, the late Ockie Oosthuizen) later appealed the FSCA rulings and fines.

It is part of a much more complex investigation by the authority into the Steinhoff corporate scandal.

“The FSCA notes the decision of the Financial Services Tribunal… regarding insider trading contraventions in respect of Steinhoff International Holdings N.V. shares,” the financial regulator said in its statement.

“The tribunal has confirmed the decision of the FSCA that Mr Markus Jooste contravened Section 78(5) of the Financial Markets Act in that he encouraged persons to trade in Steinhoff shares whilst he was in possession of inside information regarding Steinhoff,” the FSCA added.

“The tribunal has however referred the determination of an appropriate penalty to the FSCA for consideration with reference to its findings concerning the basis on which the administrative penalty was calculated,” the authority further pointed out.

“The tribunal dismissed the finding of the FSCA that Ocsan Investment Enterprises… through its former director traded on inside information in contravention of section 78(1) of the Financial Markets Act, stating that the content of the SMS sent was not sufficiently specific or precise to qualify as inside information as envisaged by the Financial Markets Act,” the FSCA highlighted.

“Thus, the administrative penalty against Ocsan was set aside. Consequently, Mr Jooste was also found not to have contravened Section 78(4) of the Financial Markets Act in respect of trades by certain other persons,” the watchdog added.

From the FSCA’s statement, it is clear that Jooste still faces a sizeable fine for contravening at least part of the Financial Markets Act.

Jooste’s initial portion of the FSCA’s fine amounted to around R161.6 million.

It is the largest insider trading fine levied by the FSCA, dwarfing the previous record of R24 million slapped on Deutsche Bank in 2019.

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One would assume by now after all the issues, Jooste is barred from being a director or office bearer of any company. It would be interesting to check on CIPC where Jooste is still a director and where he was, who replaced him. Probably a tame proxy?

The punishment Jooste already has is the blow to his Ego. Everybody, from his family to his gardener to the waiters and people passing him in the street all know exactly he is, nice life in Hermanus or Stellenbosch or not. Even the dogs know.

Jooste, Magashule, that crying Eskom guy and his CFO, the Guptas and their sidekicks, the Regiments crowd, the PPE band of thieves and many more : may you end 2022 in prison. My sincere seasons greeting.

The bulk of his assets is hidden beyond the firewall of offshore trust structures in tax havens. Everybody with similar structures will be watching this case closely. The German authorities will put pressure on the OECD to undermine the walls of this asset protection structure. If Jooste is found guilty, the courts, in search of financial retribution, will shift their focus to the offshore structures.

This case will test the sanctity of offshore trust structures.

End of comments.

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