Nairobi Businessman Fined Ksh204M for Making Millions From Unsuspecting Kenyans

  • CMA boss Paul Muthaura at a past presser File
  • Nairobi businessman Rodrick Muroni, who pocketed Ksh104 million from irregular transactions is facing jail time and seizure of his assets.

    He has also been slapped with a Ksh 204 million fine and subsequently banned from trading any bonds or shares for a period of 10 years.

    This is after the Capital Markets Authority (CMA), which is the regulatory body of the stock exchange, found him guilty of engaging in market manipulation from 2016- 2017

    Mr.Muroni was accused of using privileged information to trade bonds which he used to make dual trades at the expense of other business people. 

    Stockbrokers discuss at the Nairobi Securities Exchange

    In simpler terms, this means he colluded with stockbrokers who buy and sell shares on behalf of their clients. The brokers would receive orders from their clients on which stocks to sell and buy, they would then inform Mr. Muroni who would buy them at a lower price than the market value of the shares.

    Brokers who were ordered to buy shares would then purchase them from Muroni at exorbitantly high prices.  All this would happen without the knowledge of the ordinary Kenyan who would incur the expense of overvalued share prices. 

    This practice is called insider trading and went on for a year.

    The proceeds from these transactions were shared between Mr. Muroni and fixed income dealers at brokerage firms. 

    The Capital Markets Authority also handed over his file to the DPP for the prosecution of criminal charges. 

    His file was further given to the Assets Recovery Authority for them to repossess assets gained from the proceeds of these trades.

    In January 2019, the CMA fined one David Maena a total of Ksh166.9 million for similar crimes committed between 2016 and 2017.  

    In 2018, the CMA prosecuted 14 such cases, the highest number in their history.

    An investor looks at the trading board of the Nairobi Securities Exchange