The directorate of market abuse (DMA) committee of the Financial Services Board (FSB) decided at a special meeting on Friday to continue with a formal investigation into the false and misleading statements by Harmony Gold in its financial results for the quarter to March 2007. The DMA committee is mandated to investigate and where necessary take enforcement action against market abuse on the financial markets. “Three kinds of market abuse are prohibited in South Africa, namely insider trading, market manipulation [prohibited trading practices] and false reporting relating to the affairs of a public company,” the FSB said on Friday. “The DMA can refer cases of insider trading to the FSB enforcement committee. In such cases, the enforcement committee may order that the alleged offender pay to the FSB the profit made or the losses avoided as a result of the offending transactions, and a penalty of up to three times such amount. These funds are distributed, after recovery of costs, to persons who may have been prejudiced by the offending transactions. Market manipulation and false reporting cases can also be referred to the committee that can impose a penalty and a cost order on the alleged offender.” In cases where market abuse transgressions are also criminal the DMA provides all necessary information to the national director of public prosecutions. Since 1999, the DMA and its predecessor, the insider trading directorate, investigated a total of 345 cases. Of those, 251 cases were closed because there was no, or insufficient, evidence that the Financial Markets Act of 2012 (or the now repealed Insider Trading Act and Securities Services Act) was contravened. – Staff Reporter