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Why CMA slapped insider trading suspect with Ksh208 million fine

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The alleged rewards for bond trader Rodrick Muhoro amounted to Ksh104 million. The fine he will receive from the Capital Markets Authority (CMA) is double that.

Capital Markets Authority (CMA) said in a press statement on May 15 that the financial penalty of Ksh208 million is twice the amount that Muhoro is suspected to have benefited from in alleged irregular trading of government securities in 2016 and 2017.

According to investigations by CMA, Muhoro conspired with brokers to defraud investors in bond transactions undertaken between January 2016 and June 2017 through an unethical process called front running.

According to Investopedia, front running is when a broker enters into a trade because they have foreknowledge of a big non-publicized transaction that will influence the price of the asset. The move thus results in a likely financial gain for the broker, albeit at an advantage over the public.

Front running can also occurs when a broker or analyst buys or sells shares for their account ahead of their firm’s buy or sell recommendation to clients (again, due to foreknowledge of privileged information.).

CMA defined it as thus, “Front-running is a market manipulation scheme involving an unethical and illegal trading practice in which a broker with advance knowledge of a specific market orders with price differentials of a financial security for clients earns an arbitrage profit by placing an order for their own account or a person associated with the broker in advance of the client’s orders.”

[Read:Word of the Day: Insider trading]

The scheme, as per the regulatory body, happened when Muhoro colluded with fixed income dealers at brokerage firms through creation of artificial arbitrage opportunities, “thereby realising a capital gain of Kshs104 million by taking advantage of the price differential before the client orders were executed.”

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In contravention of provisions of the Capital Markets Act, the gains were later shared between Muhoro and fixed income dealers at brokerage firms.

Further action

In addition to the fine, CMA also said that it has placed a 10 year ban on Muhoro that will restrict him from conducting bonds trading.

The regulatory body added that the matter will also be referred to other professional bodies and state authorities for further action.

CMA’s statement dated May 15 said, “The Authority will refer the matter to the Director of Pubic Prosecution for consideration of criminal investigations on market manipulation … the Asset Recovery Agency to trace and recover assets allegedly bought with illegal capital gains … the Institute of Certified Public Accountants of Kenya for consideration of disciplinary action for professional misconduct.”

Last year in May, Muhoro sued CMA as well as Bank of Africa relating to the regulator’s investigation proceedings which required confidential information from the lender. Muhoro argued that CMA had yet to respond to the bond trader’s queries regarding the nature of the investigations.

[See Also:Mwendwa responds to critics on AFCON team selection]

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Uhuru Cuts Ruto Down to Size in New Executive Order

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President Uhuru Kenyatta on Wednesday moved to cement his authority as the leader of government by abolishing the Presidency in a new executive order that domiciles Deputy President William Ruto’s office under the Office of the President (OP).

This effectively renders DP Ruto powerless as he will be unable to hire and fire staff as the privilege will now be a preserve of Head of Public Service Joseph Kinyua.

The major political ramifications of the executive order are that the Office of the Deputy President will no longer have an independent budget, or be autonomous and will from now on take orders from (OP)

Executive Order No 1 of 2020 also places Ruto’s Chief of Staff Ken Nyaucho Osinde under the OP which means that he will now be reporting to State House Chief of Staff Nzioka Waita. Nyaucho will now work hand in hand with Waita and Kinyua.

The Executive Order also places the Nairobi Metropolitan Services Authority (NMS) under the OP giving President Uhuru Kenyatta the proximity to oversight the body created to “restore” Nairobi’s glory.

Uhuru’s latest move is eerily similar to one he made last year that gave Interior Cabinet Secretary Fred Matiang’i sweeping powers on the oversight of Government programmes at a time DP Ruto had perfected the art of traverssing the country under the guise that he was supervising government projects at the behest of President Kenyatta.

On Tuesday, President Kenyatta took his crackdown on DP Ruto’s allies to the National Assembly at a Parliamentary Group (PG) meeting held at State House just weeks after kicking out Ruto stalwarts from powerful senate positions.

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In the changes, National Assembly Majority Whip Benjamin Washiali and his Deputy Nominated MP Cecily Mbarire were kicked out in favour of Navakholo MP Emmanuel Wangwe and Igembe North MP Maoka Maore respectively.

During the PG, meeting President Kenyatta once more dressed down Ruto’s allies and faulted them for disrespecting him. The president also intimated that he knew that Ruto’s allies refer to him as “a drunk”.

In the eventful PG meeting, the President fell short of saying that he will not be supporting Ruto as he promised in campaign rallies in the build-up to the 2013 general elections.

I will be happy to know that the person I will be passing the baton to is part of my agenda,” Uhuru told the 212 MPs. 

The President’s remarks came after he enjoyed a night out with Opposition chief Raila Odinga after the Madaraka Day celebrations at State House during the day.

The duo arrived at the Nairobi CBD in the middle of the night and was seen inspecting the re-carpeting of roads by the NMS.

See Also>>> Uhuru Pumps Sh2 Billion to Save Ailing Tourism Sector

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An Executive Order by President Uhuru Kenyatta

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An Executive Order by President Uhuru Kenyatta has abolished the Presidency and instead put the office of the Deputy President under the office of the president.

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THE PRESIDENT
EXECUTIVE ORDER NO. 1 OF 2020
THE ORGANIZATION OF GOVERNMENT

IN EXERCISE of the powers conferred by Article 132 (3) (b) of the Constitution, as read with all other enabling Laws, I, UHURU KENYATTA, President and Commander-in-Chief of the Kenya Defence  Forces, order and direct:

(i) THAT the Government shall be organized as set out in this Order;
(ii) THAT this Order contains portfolio responsibilities and changes made in the structure of Government;
(iii) THAT this Order assigns functions and institutions among Ministries and State Departments; and
(iv) THAT this Order supersedes Executive Order No. 1 of 2018 (Revised) issued in July 2018.

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Get breaking news on your Mobile as-it-happens. SMS ‘NEWS’ to 20153

ISSUED under the HAND AND SEAL of the President of the Republic of
Kenya at State House, Nairobi this 11th day of May, 2020.

UHURU KENYATTA,
PRESIDENT.

Click here–> Executive Order No. 1 of 2020 formatted final Updated

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ARTIST SPOTLIGHT: Pinnto, fast-rising Kenyan musician who is destined for greatness

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I love good music and whenever I come across an artist who makes dope jams, I always feel the need to inform other people about them because as they say, sharing is caring.

Also read: Gengetone is still alive, kind of

The talented musician I want to tell you about today is none other than Bernard Oduor Nyariro, popularly known as Pinnto.

His dad was a DJ and coupled with the fact that he knew that he had a special gift, this inspired him to start writing his own songs. As he was growing up, Pinnto looked up to the likes of Jua Cali, E-Sir and Nonini.

Pinnto has been doing music professionally for the last 8 years but it’s only a few years back when people started to notice how talented he is.

Asked why it took him so long to get his name out there, the fast-rising dancehall singer explained that it takes long to penetrate the Kenyan music industry because one must have good quality and show that they are serious.

Pinnto

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He is a very versatile artist which means that today you will find him spitting bars today and doing a dance hall jam the next day and Gengetone the day after that. However, he says if he does a Gengetone jam he will be careful.

Pinnto dreams of working with Khaligraph Jones, Masauti, Sauti Sol, Timmy Tdat so if they are reading this, please reach out to this guy.

He recently released a new song titled Under Curfew and it has been getting a lot of love. Interestingly, he wrote the wrote the some time back and decided to release it now that we are under a nationwide curfew.

Watch his latest jam titled Under Curfew below and tell us what you think.


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