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Former Steinhoff CEO fined millions for insider trading

Former Steinhoff International Holdings CEO Marcus Jooste has been fined more the US$9.9 million after the South African financial authority found he had warned several shareholders about the business’ incoming crash in 2017, and told them to sell their stock.

The Financial Sector Conduct Authority said that Jooste had acted on insider information, that if made public would “be likely to have a material affect on the price of value” of the business’ securities, when he sent four shareholders a ‘warning SMS’. Several of them sold their shares and avoided the crash.

In doing so Jooste committed insider trading, a fineable offence.

“That’s probably the most expensive SMS sent in South Africa’s history,” the FSCA’s Brandon Topham said, according to Bloomberg.

“The moral of the story for the public is, even if you don’t trade and you just provide information, you can still be liable for a pretty serious administrative penalty.”

Steinhoff is a multinational furniture group and owns and operates Greenlit Brands in Australia and New Zealand, which is comprised of Freedom, Fantastic Furniture, Snooze, Original Mattress Factory and Plush Sofas.

Jooste acted as CEO for the beleaguered furniture firm up until a $9.2 billion hole was found in the company’s finances in late 2017 – an irregularity that sparked the business’ stock crash and an independent investigation.

And in 2019, investigator PwC found evidence of fictitious and irregular transactions on the company’s books dating back ten years, made at the behest of senior management which inflated the business’ profit and asset values.

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