Saudi CMA Fines 15 Traders SAR 10.7M, Orders SAR 12M Disgorgement

Saudi Arabia's Capital Market Authority (CMA) has issued final decisions against 15 individuals for manipulating shares of six insurance companies between August 30, 2021 and July 6, 2022. The regulator imposed fines exceeding SAR 10.7 million and ordered the convicts–along with other investors–to disgorge more than SAR 12 million in illegal gains. The rulings, announced on May 14, mark one of the larger coordinated enforcement actions against retail insurance stock manipulation in the Saudi market and open a compensation mechanism that could create a lingering overhang for the affected names.

Six Insurance Stocks at the Center of the CMA Case

The Convicted Individuals and Their Trades

The Appeal Committee for the Resolution of Securities Disputes (ACRSD) convicted the following individuals for violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations:

Hassan Almayouf
Shahd Alrasheed
Saleh Alrasheed
Latifa Alsulaiman
Omran Alomran
Reem Alomran
Afnan Alomran
Ahmad Alhuwaimel
Noura Alhuwaimel
Muhammad Alhoushan
Ahmad Alhoushan
Abdullah Alhoushan
Omar Alhoushan
Khaled Aljeraiwi
Muhammad Omran

The trading activity occurred exclusively in insurance company shares, a sector where liquidity can be thin and price moves more easily influenced. The clustering of surnames suggests coordinated use of family-linked accounts, though the CMA did not detail the relationships.

The Six Targeted Insurance Companies

The manipulated shares belonged to: Mutakamela Insurance Co. (formerly Allianz Saudi Fransi Cooperative Insurance Company), Saudi Arabian Cooperative Insurance Co. (SAICO), Arabia Insurance Cooperative Co., Al Sagr Cooperative Insurance Co., United Cooperative Assurance Co., and CHUBB Arabia Cooperative Insurance Co.. These are all listed on the Saudi stock exchange (Tadawul). The breadth of names–spanning smaller and relatively established insurers–means the manipulation likely distorted trading volumes and price discovery across a wide segment of the sector.

The Manipulation Mechanics: Buy Orders to Distort Prices

The CMA stated the violations involved “manipulative and fraudulent practices aimed at creating a misleading and incorrect impression of the securities.” Specifically, the individuals used their own investment portfolios–or those they managed–to enter buy orders intended to influence share prices. Some of those orders were linked to sell orders, pointing to a classic order-book manipulation scheme where the illusion of demand was used to unload positions at artificial prices.

In thinner insurance names, even modest buy orders can move the tape. By repeatedly placing visible bids and executing small trades, the convicted traders could push prices high enough to benefit from existing holdings. The regulator’s decision to pursue disgorgement from “other investors” as well indicates the CMA believes the manipulation extended to accounts beyond the 15 named individuals, possibly relatives or associates who profited indirectly.

Penalties: SAR 10.7M Fines and SAR 12M Disgorgement

Disgorgement Extends to Other Investors

The total fines imposed on the 15 individuals exceed SAR 10.7 million. Separately, the ACRSD ordered the convicts and other investors to pay more than SAR 12 million to disgorge illegal gains. The inclusion of “other investors” signals the CMA traced profits beyond the directly convicted parties. That broad disgorgement net could mean the regulator will pursue additional individuals or entities in the future, adding a layer of uncertainty for anyone who traded alongside the manipulators.

Compensation Mechanism Opens Potential Overhang

Filing Claims: A Path for Affected Investors

The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) announced that any person affected by these violations can file a compensation claim–either individually or as a class action–against the convicted individuals. Additionally, anyone who entered into an agreement or contract with Khaled Aljeraiwi related to the unlicensed activity can request rescission of that contract and recovery of any money or property transferred. Both paths require first filing a complaint with the CMA.

The GS-CRSD will publish on its website any class action suit filing, allowing other investors to join. This transparency mechanism could trigger a cascade of claims if a lead plaintiff emerges, turning the episode into a much larger financial liability for the convicts and potentially forcing liquidation of assets, including any remaining stock holdings.

What Large-Scale Compensation Could Mean for the Stocks

If a class action gathers momentum, the convicted individuals–and possibly others ordered to disgorge–may need to sell shares to fund repayments. Those sales would fall disproportionately on the six insurance names, which may already suffer from reduced investor trust after the manipulation revelation. Even without actual selling, the overhang of potential sales can depress stock prices as market makers widen spreads and long-only funds reduce exposure to avoid headline risk. The violations occurred relatively recently, meaning many current shareholders might not know whether their purchase price was distorted, amplifying the uncertainty.

Market Integrity Signal or Near-Term Volatility?

Regulatory Deterrence vs. Price Distortion Legacy

The simple read of the CMA’s action is that it strengthens market integrity. A regulator that aggressively pursues manipulation and disgorges gains deters future misconduct and builds long-term confidence. For the six named insurance stocks, the better market read is more nuanced. The convictions confirm that their price action during an 11-month window was, at least in part, artificial. Current valuations may still embed some of that artificiality, especially if the disgorgement does not directly reverse the price impact. The compensation mechanism could force a reckoning: as affected investors seek damages, the stocks could face selling pressure that realigns prices with fundamentals.

Catalysts That Would Confirm or Weaken the Overhang

Confirming a deeper overhang:

GS-CRSD announces the first class action filing.

Unusual volume appears in the six insurance stocks as claimants or convicts liquidate positions.

CMA opens further investigations into related accounts or other insurance names.

Weakening the overhang:

No compensation claims are filed within the statutory period.

The affected stocks trade in line with sector peers and volume returns to normal.

CMA signals the case is closed and no further disgorgement will be sought.

For now, traders holding or watching any of the six insurance names should monitor the GS-CRSD website for class action filings and track volume anomalies. The SAR 10.7 million in fines and SAR 12 million disgorgement are significant, however the larger risk is the compensation path that could turn a regulatory headline into a tangible supply overhang for these stocks. The Saudi stock market, where these insurance companies trade, has seen the CMA increasingly active in enforcement, and this case may set a precedent for how manipulation-linked liabilities flow through to share prices.