Guiding consumers since 2009

FSB fines Reneicke R25 000

By Danielle van Wyk

Yesterday saw the imposing of a R25 000 penalty against Wolfgang Reinecke (the respondent), after his case was referred to the Enforcement committee of the Financial Service Board (FSB). The case was referred by the directorate of market abuse, in relation to a contravention of the Financial Markets Act (FMA).

“During the period from 13 January to 21 January 2015 the Respondent had access to an Over the Counter platform to buy large volumes of Contracts for Difference (CFDs) including CFDs in Comair Limited (Comair).

CFDs are contracts between a market participant and a CFD provider wherein the parties agree to exchange the difference between the current values of the underlying share, in this case Comair, and the value of the share at the expiry date of the CFD. A holder of a CFD does not own the underlying share but has exposure to the full price movement of the share whilst using less capital,” explained the FSB.

During, the period mentioned above, the respondent proceeded to place orders, on a recorded ten instances, of the same Comair share on the JSE Equity market.

His conduct enabled him to acquire Comair CFDs at a lower price than he otherwise would have in the absence of his equity orders. The purpose of his equity orders was to exploit the interrelatedness between the Comair share and the pricing of the Comair CFDs,” the FSB stated.

This constituted a false sense of supply or demand for Comair shares and a potentially artificial price for the share.

“The respondent admitted that he ought reasonably to have known that his conduct constituted a prohibited trading practice as provided in section 80 (1) (b) of the FMA,” said the FSB.

The parties then met and agreed on the penalty, which was ultimately enforced by the chair of the Enforcement Committee, yesterday.

In arriving at an appropriate penalty the directorate took into account inter alia that the respondent was an inexperienced investor; that he immediately ceased trading in the manner mentioned above once he was made aware of the wrongfulness of his actions; that the main purpose with the transactions related to his CFD trading, and it was not to affect other market participants in any manner; that the respondent has never been found to have contravened the FMA prior to this matter; that he has expressed regret for his actions and that he gave his full cooperation to bring the matter to finality,” added the FSB. 

Recent Articles

Featured What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Can your retirement annuity be used as collateral for a loan?

If you have a retirement annuity, you may have wondered whether you can use this as collateral when you take out a loan. We decided to do the leg work and find out whether this is possible or not.

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.

Best ways to save your money short-term

For many, it seems close to impossible to save when spending on holiday getaways, Christmas gifts, while also trying to ensure there’s money left to survive January. Justmoney takes a look at the best ways you can save during the short term.

Deals

Marble Gift Card Special

Price: From R1000
When: Until 25 December 2019
Where: Johannesburg

Trennerys Hotel and Camping Januworry Special

Price: R950
When: From 10 to 31 January 2020
Where: Centane (Eastern Cape)

Bakwena Standard Packages Special

Price: From R999
When: Until 31 December 2019
Where: Nationwide