ABHA, 11 June 2006 — The recent stock market crash affected more women investors than men, according to a legal expert on share market.
Lawyer Muhammad Al-Saieri attributed the women’s added vulnerability to the crash in the Saudi bourse to their inexperience and ignorance about the pitfalls in the market, which they mistook for a safe place to invest and make quick profits.
“Instead of relying on scientific analysis of the company in which they intended to invest they have been lured by the hearsay and false rumors about some companies’ profits,” Al-Saieri said.
The legal expert said the victims of share market crash have a right to sue the Capital Markets Authority (CMA) provided they can identify CMA’s role in causing the loss.
The lawyer noted that all the details about the crash are with the CMA, which is the sole agency that can disclose the names of the stock dealers who were involved in dubious operations that triggered the market crash and consequent investor losses.
“This is a situation where your opponent and judge is one,” said the lawyer.
Al-Saieri added that the ball is now in the CMA’s court as it is sitting on the top of all the documents about investors who have been making dubious dealings. It can, if it has the will, bring to book all the market sharks that created steep losses for thousands of people across the Kingdom.
It is quite natural in a speculating market to have volatile situations leading to profits and losses. On the other hand it is, undoubtedly, unnatural to tumble the index by 1,000 points in a single day. Such things do not happen in any of the markets in the world in normal circumstances, Al-Saieri said.
The lawyer wondered why the CMA did not take the steps to stop the transactions in the market when it observed unnaturally sharp falls. It was within the jurisdiction of the CMA to interfere and take corrective measures to steady the market as the financial authorities in India did a couple of weeks ago, he said.
When the Bombay stock market indices fell by 700 points recently authorities stopped all the transactions with the aim of protecting the interests of the public.
In the Egyptian stock market, transactions were suspended for three hours two months ago when similar unhealthy stock market developments were noticed. Such moves from the authorities are also aimed at boosting the investor confidence and creating in them a sense of security.
“It is certainly the right of the investor to demand that the CMA reveal the perpetrators behind the foul play leading to the market upheavals. But it is always better to proceed through official channels such as a request demanding the disclosure of the persons who made dubious transactions,” said the lawyer.
In case the CMA refuses to comply with the investor’s demand, he may complain to the Court of Grievances, he added.
After the bourse lost about 40 percent this year, the CMA has adopted a series of measures, including the formation of a capital market company, the setting up of independent investment funds and the establishment of a new stock exchange system, to bolster the market.
