Bond dealer faces watchdog sanctions
The financial and investment analysts watchdog is set to begin disciplinary hearings against a rogue treasury bonds dealer the Capital Markets Authority (CMA) found guilty of insider trading.
The Institute of Certified Investment and Financial Analysts (Icifa) said its disciplinary arm had set in motion the process to consider disciplinary action against David Tumaini Maena for professional misconduct, in line with the decision by CMA. It may include expulsion.
“This case has been forwarded to the disciplinary committee who will deal with it in accordance with procedure laid out in the IFA (Investment and Financial Analysts) Act. Due process will be followed before the appropriate action is announced,” Icifa chair Job Kihumba said. It is not clear how long the watchdog will take to conclude the disciplinary action.
“I am not a member of the committee, which, as you may confirm with the Act, is independent. Let us give it time to deal with the matter in accordance with its mandate,” Mr Kihumba said in an interview.
The industry regulator is empowered to take disciplinary action against financial analysts in breach of fiduciary duty.
It was formed in 2015 to rein in rogue advisers and dealers who threaten investor wealth through misleading advice. The regulator is anchored in the Investment and Financial Analysts Act (2015) — which came into operation on December 8, 2015 – and requires all in the profession to apply for a practising certificate.
Icifa in January this year gazetted names of its 531 members who included financial analysts, dealers, fund managers and owners of brokerage and advisory firms, marking its several steps in enhancing industry professionalism. It listed Mr Maena as FA/00343 in the gazette notice Dated the 31 December 2018.
On Tuesday, the CMA found Mr Maena guilty of engaging in market manipulation between 2016 and 2017. The capital markets regulator said he pocketed Sh83.4 million from irregular trades. Mr Maena, a former CBA Capital executive, now faces jail as well as seizure of personal assets by the State. We established earlier that Mr Maena has since quit CBA Capital. He joined Sterling Capital after but also later left when the probe came to light.
CMA fined him, Sh166.9 million, being double the benefit accrued from the irregular trades.
The regulator also referred his case to the Assets Recovery Agency (ARA) with recommendation to confiscate assets he may have acquired from the illegal proceeds.
CMA also handed his file to the Director of Public Prosecution (DPP), Mr Noordin Haji, to consider opening criminal investigations related to the irregular trades.
In addition to the fine, the CMA said Mr Maena was disqualified by CMA from holding office “as a key officer of a public listed company and or issuer, licensee or any approved institution of the Capital Markets Authority” for a period of 10 years.
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