Whistleblowers will earn up to Sh5 million for leaking capital market fraud after the regulator gazetted new rules in an effort to stop economic crimes.
The Capital Markets (Whistleblower) Regulations 2022 outlines how the rewards will be implemented including compensation of 3 percent of the amount recovered, persons eligible for the reward, forms of reporting, information required and the protection for the informants, among others.
“Where CMA successfully recovers penalties and illicit gains in the capital markets, whistleblowers shall be eligible to a reward of 3 percent of the amount recovered subject to a maximum reward of Sh5 million in line with Section 18 (2A) (b) of the Capital Markets Act and the Whistleblower Regulations,” said Wyckliffe Shamiah, CMA’s chief executive officer.
The remainder of the funds recaptured will be transferred and held in the investor compensation fund. The informer will get compensated after 90 days upon repossession of sums lost.
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The new laws highlight instances of reportable misconduct including capital market fraud, failure to comply with the CMA laws and other offences under the Act.
The CMA banks on the award scheme to promote investor confidence in markets by arresting irregularities in the market such as share price manipulation, insider trading, breach of governance code and theft among others.
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