The JSE is investigating suspicious trading in FrontRange shares ahead of a cautionary notice issued on Monday.
The FrontRange share rose 11% on Monday after the notice was issued, but increases on unusual volumes before the announcement sparked the JSE`s interest.
Peter Redman, who is responsible for surveillance at the JSE, says the exchange examines trading before a price-sensitive announcement as a matter of routine. In this case, it noticed that the share price moved on unusual volumes prior to the notice being issued.
The Financial Services Board (FSB) says the JSE`s investigation is still at an early stage and has not been handed over to the FSB.
"Whenever there is any abnormal activity in trading volumes, the JSE will conduct an investigation," says Rob Barrow, who heads the FSB`s insider trading directorate. "If it identifies something, it will do a full analytical investigation."
He says patterns indicate that there may be insider trading activity relating to FrontRange shares, but the investigation is still at an early stage.
If the JSE decides after a full probe that there is a case, it will then be handed over to the FSB.
Redman emphasises that it is not FrontRange being investigated, but trading in FrontRange shares.
Related stories:
FrontRange cautionary sparks talk of buy-in
Share