Viceroy hit with R50m fine over ‘misleading’ Capitec report

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Viceroy hit with R50m fine over ‘misleading’ Capitec report

FSCA’s decision opens the way for penalties to be imposed on other analysts who make false recommendations

Garth Theunissen

The Financial Sector Conduct Authority (FSCA) has imposed a R50m administrative penalty on Viceroy Research and its partners for making false, misleading and deceptive statements about Capitec.

The fine was imposed in response to a report by Viceroy, titled “Capitec — A wolf in sheep’s clothing”, published on January 30 2018. The financial penalty is imposed on Viceroy and its partners Aiden Lau, Fraser John Perring and Gabriel Bernarde. The penalty is jointly and severally payable by the respondents within 30 days from the date of the order, which was communicated to Viceroy on August 30.

FSCA commissioner Unathi Kamlana said that according to information the regulator had obtained, it was clear Viceroy published its report with the goal of benefiting via a profit-sharing arrangement with a client that had taken a short position in Capitec shares. That meant Viceroy had a direct interest in the potential loss of value in Capitec’s share price in the wake of its report, even though it could have hurt the savings of people whose retirement funds might have been invested in the share at the time...

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