The Capital Markets Authority (CMA) has committed to increase its collaboration with the Criminal Investigations Directorate(CID) of the Uganda Police as one of the measures to enhance investigation and enforcement of offences under the CMA Act. Over the past few months, the Authority has received a series of complaints from the public about unscrupulous individuals and firms that are holding out as investment advisers and fund managers, and fleecing the unsuspecting public while sometimes promising incredible returns. Additionally, there have been media reports of investment schemes which have ended up disappearing with people’s savings, leaving them in dire financial troubles.
In his remarks delivered during a one-day’training organized by CMA in Kampala to equip the CID officers with basic knowledge about capital markets, and the offences and penalties under the various laws, the Chief Executive Officer of the Authority, Mr. Keith Kalyegira said that as the economy grows and the financial sector becomes more sophisticated, there is bound to be a spike in financial crime particularly by those holding out and engaging in regulated activities without being licensed or approved.
“The capital markets in Uganda have gradually grown over the past two decades and as a result, we are now witnessing an increase in complaints especially those related to fraudulent or unlicensed players in the industry, many of which we are now aware are simply ponzi schemes”, Kalyegira said.
“This is why we want to collaborate more closely with the Uganda Police, whose mandate and expertise is criminal investigation to ensure that once we detect or receive information about such activities, we are in position to ensure investigations and enforcement action is swiftly undertaken.”
Mr. Kalyegira noted that an effective enforcement system is a prerequisite for building confidence in investing in the capital markets which is important for the development of capital markets, and therefore this is going to be an area which the Authority will pay closer attention to, going forward.
“We must work closely with the Uganda Police as well as the office of the Director of Public Prosecutions (DPP) to stop errant persons – Ugandans and non-Ugandans, who’re defrauding innocent people of their hard earned savings through issuance of unregulated or unapproved products”, he added.
“Whereas technology has been instrumental in facilitating financial inclusion, we are cognizant of the fact that some of the wrong elements use technology to manipulate the system and working with the two institutions, we hope to address these challenges.”
Mr. Kalyegira urged the officers to not only use the knowledge they have acquired to investigate crimes but also to participate in the market as savers by gradually investing in well regulated and safe financial products such as collective investment schemes.
CMA’s Director for Legal and Board Affairs, Mrs. Angela Kiryabwire Kanyima noted that the CMA Act was drafted in such a way that all offences are criminal as opposed to being administrative,and that enforcement can only be undertaken upon conviction. This therefore makes it imperative for CMA to work very closely with the Police and DPP’s office to ensure effective investigations and enforcement.
“In some jurisdictions such as Kenya, the capital markets regulator has a Police desk within their premises to ensure investigations are handled as swiftly as possible”, Ms. Kanyima said.
“However, to achieve this efficiency in Uganda, we must build the capacity the investigating officers and enhance our collaboration in order to effectively deliver on our investor protection mandate.”
The Acting Commissioner of Police Anti-Corruption in charge of Urban Authorities and Project Fraud, Mr. Joseph Ojinga thanked the Authority for the initiative to build capacity of their officers, adding that this will go a long way in enabling them better understand and appreciate how to investigate capital markets offences, as well as how they can grow their personal savings by investing in the market.
“We are delighted to have been given the opportunity to not only improve our knowledge of the work we do, but also knowledge of how to improve our financial welfare”, Mr. Ojinga said.
“We are committed to working with the CMA to deter criminals who take advantage of our citizens so that together, we can improve the safety of our capital market.”
Ends…
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