DUBAI, 30 August 2005 — Stock market authorities in the Gulf emirate of Dubai yesterday vowed to punish those behind suspected fraudulent trading worth $2.5 billion in the UAE’s largest Islamic bank.
“The authority ordered today severe penalties which will be announced in the media tomorrow (Tuesday),” Abdullah Al-Turaifi, executive director of the Securities and Commodities Authority, told Dubai-based Al-Arabiya television.
He said all trades involving Dubai Islamic Bank stock on Sunday would be canceled after a staggering 268.23 million shares worth 9.34 billion dirhams ($2.5 billion) changed hands. Most of the trade was done in fake deals by two investors apparently seeking to affect the bank’s share price to make a quick profit, according to market authorities.
“The people who took part in the manipulation or took advantage of the manipulations in the market will be completely stopped from trading in the financial markets,” Turaifi warned. The ban will affect investors based both inside and outside the United Arab Emirates, as well as the as yet unnamed brokerage house which Turaifi said “knew directly and very well about the irregularities by these manipulators.”
The United Arab Emirates has two stock exchange markets, one in the oil-rich emirate of Abu Dhabi and another in Dubai which plans to launch an international stock market next month.