The Capital Markets Authority (CMA) wants an appeal filed by former head of one of Kenya’s biggest stockbrokers to overturn his punishment over the KenolKobil insider trading case dismissed.
The regulator wants the appeal by Andre DeSimone, who left his position as chief executive of Kestrel Capital in April last year after the insider trading allegations, to be declared time barred.
The regulator says that the law requires that a demand for an appeal be done within 15 days, arguing that Mr DeSimone is fighting the punishment more than nine months after it was meted out.
Mr DeSimone in February launched a legal fight against the CMA for banning him from holding a senior role in a listed firm or a brokerage for a year, arguing that the regulator had failed to establish that he profited from the leaked information.
He wants the Capital Markets Tribunal to quash the ban, reverse the Sh2.5 million fine slapped on him for sharing the price sensitive information and offer him a just compensation on claims that evidence before the regulator does not meet the threshold for insider trading.
The regulator said Mr DeSimone paid the Sh2.5 million fine on time, saying he could have hired a lawyer to file his appeal in the period the stockbroker was away in the US.
The regulator said that Mr DeSimone had through oral and written statements admitted that he disclosed price sensitive material to the two stockbrokers who then went ahead and used it to trade 59.8 million shares and would have gained Sh481.2 million from the illegal trades.
CMA said that he deleted WhatsApp messages, call records and text messages from his seized BlackBerry mobile phone and edited Mr Satchu’s response to the regulator on the insider trading allegations in an attempt to cover up the breach.
“The mere fact that the applicant was supposedly consulting, seeking opinions and deliberating with other people is not sufficient excuse for failure to file an appeal within the prescribed period,” Mr Abubakar Hassan swore in the CMA affidavit.
Mr DeSimone described how he met Mr Satchu at Capital Club to discuss opening an account for his clients who brought in up to Sh1 billion ($10 million) for the deal.
He handed over the price sensitive information when he casually told Mr Satchu he was looking to close the KenolKobil deal, sharing specific details on the takeover share offer price of Sh23 a piece. This led Mr Satchu to broker a huge purchase of KenolKobil shares on the cheap from unsuspecting investors.