Nairobi businessman Rodrick Muroni, who pocketed Ksh104 millionÂ from irregular transactions is facing jail time and seizure of his assets.
He has also been slapped with a Ksh 204 millionÂ fine and subsequently banned from trading any bonds or shares for a period of 10 years.
This is after the Capital Markets Authority (CMA), which is the regulatory body of the stock exchange, found him guilty of engaging in market manipulation from 2016- 2017
Mr.MuroniÂ was accused of usingÂ privileged information to trade bonds which he used to make dual trades at the expense of other business people.Â
In simpler terms, this meansÂ he colluded with stockbrokers who buy and sell shares on behalf of their clients. The brokers would receive orders from their clients on which stocks to sell and buy, they would thenÂ inform Mr. MuroniÂ who would buy them at a lower price than the market value of the shares.
Brokers who were ordered to buy shares would then purchase themÂ from MuroniÂ at exorbitantlyÂ high prices.Â All this would happen without the knowledge of the ordinary Kenyan who would incur the expense of overvaluedÂ share prices.Â
This practice is called insider tradingÂ and went onÂ for a year.
The proceeds from these transactions were shared between Mr. MuroniÂ and fixed income dealers at brokerage firms.Â
The Capital Markets Authority alsoÂ handed over his file to the DPPÂ for the prosecution of criminalÂ charges.Â
His file was further given to the Assets Recovery Authority for them to repossessÂ assets gained from the proceeds of these trades.
In January 2019, the CMA fined one David Maena a total of Ksh166.9 millionÂ for similar crimes committed between 2016 and 2017.Â Â
In 2018, the CMA prosecuted 14 such cases, the highest number inÂ their history.