The Financial Sector Conduct Authority (FSCA) has slapped a R50-million administrative penalty on Viceroy Research and three partners – Aiden Lau, Fraser John Perring and Gabriel Bernarde – for publishing “false, misleading or deceptive” statements about Capitec Bank in 2018 that had a negative impact on their shares.
The FSCA says Viceroy Research and its partners had contravened Section 81 of the Financial Markets Act, which makes it an offence to publish false or misleading statements about securities and which the author “ought reasonably to know” is false, misleading or deceptive.
The act also makes it an offence to omit material facts about securities that could lead to making false or misleading conclusions about securities.
Once made aware of false or misleading statements in the course of the research, the author must, without delay, publish a correction.
FSCA Commissioner Unathi Kamlana told journalists on Wednesday that Viceroy Research was alerted to the fact that its research on Capitec Bank was based on false or misleading assumptions, yet it failed to issue a correction when this was brought to its attention.
Viceroy took to Twitter after the ruling stating that they would challenge the FSCA's investigation and the fine imposed on them.
They believe the fine seeks to shut down what they call critical analysis of South African companies.
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