Zietsman and Another v Directorate of Market Abuse and Another (A679/14) [2015] ZAGPPHC 651; 2016 (1) SA 218 (GP) (24 August 2015)

Zietsman and Another v Directorate of Market Abuse and Another (A679/14) [2015] ZAGPPHC 651; 2016 (1) SA 218 (GP) (24 August 2015)

The court found that the information regarding the IDC's approval of a R99 million loan to ACT was specific, precise, and price sensitive, and not available to the public until disclosed via SENS on 11 March 2011. The appellants knew of this information and acquired ACT shares while in possession of it, thereby committing insider trading as defined in the Securities Services Act. The enforcement committee correctly rejected the appellants' arguments that the information was vague or public, and properly imposed an administrative penalty based on the potential profit, irrespective of subsequent losses. The appeal against both conviction and penalty was dismissed as there was no basis to...

Citation
[2015] ZAGPPHC 651
Parties
Appellant: Zietsman, Gavin Lyonel; Appellant: Harrison and White Investments (Pty) Ltd; Respondent: Directorate of Market Abuse; Respondent: Financial Services Board
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
24 August 2015
Case Number
A679/14
Procedural Posture
Civil Appeal / Appeal From Enforcement Committee Determination
Outcome
Appeal dismissed with costs; conviction and administrative penalty upheld.
Judges
G T Avvakoumides, N B Tuchten
Legal Topics
Insider Trading, Securities Services Act, Administrative Sanctions, Market Abuse, Definition of Inside Information
Commercial and Corporate Banking and Finance Insider Trading Securities Services Act Administrative Sanctions Market Abuse Definition of Inside Information

Case Brief

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Parties

Zietsman, Gavin Lyonel

Appellant

Harrison and White Investments (Pty) Ltd

Appellant

Directorate of Market Abuse

Respondent

Financial Services Board

Respondent

Procedural Posture

Civil Appeal / Appeal From Enforcement Committee Determination

Legal Issues

  1. 1 Whether the information regarding the IDC loan to ACT constituted 'inside information' under the Securities Services Act.
  2. 2 Whether the appellants knowingly dealt in ACT shares while in possession of inside information.
  3. 3 Whether the enforcement committee erred in its factual and legal findings regarding insider trading.

Ratio Decidendi

The court found that the information regarding the IDC's approval of a R99 million loan to ACT was specific, precise, and price sensitive, and not available to the public until disclosed via SENS on 11 March 2011. The appellants knew of this information and acquired ACT shares while in possession of it, thereby committing insider trading as defined in the Securities Services Act. The enforcement committee correctly rejected the appellants' arguments that the information was vague or public, and properly imposed an administrative penalty based on the potential profit, irrespective of subsequent losses. The appeal against both conviction and penalty was dismissed as there was no basis to...

Court Disposition

Appeal dismissed with costs; conviction and administrative penalty upheld.

Orders

  • The appeal against the conviction and the administrative penalty is dismissed with costs.