FSCA imposes a hefty R20 million penalty on ex-Steinhoff CEO Markus Jooste

In another twist of the tale, the South African Financial Sector Conduct Authority (FSCA) has now imposed a revised administrative penalty of R20 million on Markus Johannes Jooste.

Jooste is a former Steinhoff International Chief Executive Officer (CEO) and he is penalised for breaching the Financial Markets Act.

FSCA released a statement and explained that the R1 million penalty was levied for motivating Jaap du Toit to sell his Steinhoff shares.

“Notwithstanding the disclosure and encouragement, Mr. Du Toit never acted on the contents of the warning SMS. The provision prohibits an insider from encouraging or discouraging another person to deal in securities which the inside information relates to,” read the statement.

“This penalty is payable on or before 06 January 2022. On 29 October 2020, the FSCA imposed an administrative penalty of R161 568 068 on Mr. Jooste for breaches of both section 78 (4) (a) and section 78 (5) of the Financial Markets Act.

“The amounts of the losses avoided by the recipients of the warning SMS as a result of the offending transactions, Jooste’s level of cooperation during the investigation, the seriousness of the breaches, the need to deter such conduct as well as Mr. Jooste’s submissions regarding the merits of the case against him including his submissions regarding an appropriate penalty, were considered.”

According to the statement published by SA government news via GCIS, the Financial Sector Tribunal on 13 December 2021 set the FSCA’s administrative penalty aside and referred the determination of an appropriate administrative penalty for the contravention of section 78 (5) of the Financial Markets Act to the FSCA for consideration.

In terms of conclusions, the tribunal decided that the beleaguered Jooste did not contravene section 78 (4) (a) of the Financial Markets Act as the information he provided in the warning SMS sent to Jaap du Toit, Gerhardus Burger, Marthinus Swiegelaar and the late Ockert Oosthuizen to encourage them to sell their Steinhoff shares, was vague and imprecise.

”Section 78 (4) (a) prohibits an insider from disclosing inside information to another person,” reports the news portal.

“The tribunal advised the FSCA to consider alternative dates to calculate the losses avoided by the trades of Burger and Oosthuizen.

“In arriving at the amount of the new administrative penalty and in line with the decision of the Tribunal the FSCA said it considered a range of factors.”