RIYADH — The Capital Market Authority (CMA) announced on Monday compensation worth SR1.196 billion for more than 17,000 investors affected by violations related to the shares of Dar Alarkan Real Estate Development Company.

The violations, carried out by 17 individuals, led to a final ruling by the Appeal Committee for Resolution of Securities Disputes (ACRSD) on July 20, 2023.

The ruling, stemming from a penal lawsuit filed by the Public Prosecution and referred by the CMA, ordered the violators along with five additional investors to pay back the illegal gains.

Compensation amounts were deposited into investors’ accounts through the Compensation Fund, established by the CMA to streamline the payout process in line with a distribution plan approved by the CRSD.

This ensured that entitlements were delivered promptly and with minimal burden on beneficiaries.

The CMA said this marks the second compensation fund of its kind in the Kingdom, following the first launched in July, which completed payouts in less than three months.

The authority stressed that the initiative reflects its determination to strengthen investor confidence in the capital market and enhance protection mechanisms.

The distribution plan aligned compensation with the scale of violations, the value of illegal gains, and the harm suffered by investors. Some payouts exceeded SR1 million.

The CMA clarified that any party who believes they were harmed but not included in the plan may file an individual claim with the CRSD after first submitting a complaint to the CMA.

The authority added that compensation funds complement existing mechanisms such as individual and class actions. Criteria for establishing such funds include the scale of harm, recovery of illegal gains, and the nature and impact of the violations.

The CMA also said it has adopted international best practices suited to the Saudi market to improve compensation mechanisms, strengthen investor protection, and build a more competitive financial ecosystem. — SG