CMA summoned over irregular shares trade

The Capital Markets Authority has been summoned to court to explain how an investor lost millions of shillings through unauthorised trading of his shares.

Chief executive officer Stella Kilonzo is required to give evidence on behalf of Mr Abdalla Salim, who has sued CFC Financial Services over the loss of his money.

Mr Salim claims he bought 58,840 KenGen shares at Sh11,90 each for Sh640,696 and instructed CFC to sell them at Sh35 each.

However, he says, the stockbroker instead bought more than100,000 shares without his authority at Sh37 per share, generating Sh3.7 million.

In addition, CFC also bought shares in a number of other entities and traded them without his approval, resulting in a huge deficit in his account.

He reported the matter to the Kenya Anti-Corruption Commission and was advised to direct the complaint to the CMA.

Mr Salim said he lost over Sh1 million but accuses the CMA of exonerating the broker.

In February 2008, CFC was found guilty of illegally trading in stocks without investors’ authority and, in a landmark ruling, the High Court ordered the broker to reverse the sale of a client’s shares.

Juja Road Fancy Stores had sued CFC for the loss of more than Sh2 million after buying shares without authority.