Discovery to be investigated for insider trading

Financial services firm, Discovery is set to be investigated by local regulators for possible insider trading, according to a report by Reuters.

Shares in the company declined noticeably a day before it published a somber trading update in February, the insurer told Reuters.

Discovery shares declined as much as 5.5% on 16 February 2016, a day before the company said it expected a fall of as much as 55% in first-half profit.

Discovery said it reported the unexpected share price move to the Johannesburg Stock Exchange (JSE) who in turn notified the Financial Services Board (FSB).

“We are co-operating fully with the FSB in their inquiry,” chief financial officer Richard Farber told Reuters.

The head of FSB’s directorate of market abuse, Solly Keetse, said the regulator would disclose the details of the investigation when the report was complete.

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Discovery to be investigated for insider trading