| a) | who deals directly or indirectly, for his or her own account in the securities or financial instruments to which such information relates or which are likely to be affected by it; |
| b) | who profits or avoids a loss through such dealing; and |
| c) | who fails to prove, on a balance of probabilities, any one of the defences set out in section 4(1) or any other defence available to him or her, |
shall be liable, at the suit of the Financial Service Board, to pay to the Financial Services Board the amounts contemplated in subsection (4)(a).
| 2) | An individual who knows that he or she has inside information and who-- |
| a) | discloses that information to an individual referred to in subsection (1) and fails to prove on a balance of probabilities any one of the defences set out in section 4(2) or any other defence available to him or her; or |
| b) | encourages or causes another person to deal in the securities or financial instruments to which such information relates or which are likely to be affected by it and fails to prove on a balance of probabilities any one of the defences set out in section 4(1) or any other defence available to him or her; or |
| c) | deals directly or indirectly in such securities or financial instruments for any person and fails to prove on a balance of probabilities any one of the defences set out in section 4(1) or any other defence available to him or her, |
shall be jointly and severally liable, together with the individual referred to in subsection (1), at the suit of the Financial Services Board to pay to the Financial Services Board the amounts set out in subsection (4)(a)(i), (iii) and (iv).
| 3) | The individual referred to in subsection (2) shall, in addition, be liable at the suit of the Financial Services Board to pay to the Financial Services Board such sum determined in the discretion of the court but not exceeding three times the amount calculated in terms of subsection (4)(a)(i), together with all commission or consideration for disclosing, encouraging, discouraging or dealing. |
| a) | The Financial Services Board shall be entitled to sue by way of civil proceedings in any court of competent jurisdiction for payment of-- |
| i) | the amount by which the individual referred to in subsection (1) profited or the loss which he or she avoided as a result of such dealing; and |
| ii) | a penalty, for compensatory or punitive purposes, in a sum determined in the discretion of the court but not exceeding three times the amount of the profit gained or the loss avoided as a result of such dealing; and |
| iv) | costs of suit on such scale as may be determined by the court. |
| b) | The amount of the profit gained or loss avoided shall be determined in the discretion of the court which shall have regard to factors such as the consideration for the dealing referred to in subsection (1), the time between the relevant dealing and the publication of the inside information and any other relevant factors. |
| 5) | Any amount recovered by the Financial Services Board as a result of the proceedings contemplated in this section shall be deposited by the Financial Services Board directly into a specially designated trust account and-- |
| a) | the Financial Services Board shall, as a first charge against the trust account, be entitled to reimbursement of all expenses reasonably incurred by it in bringing such proceedings and in administering the distributions made to claimants in terms of subsection (6) and an additional sum equal to 10% of the gross amount so recovered less any amount of costs actually recovered from the other party prior to the finalisation of the distribution account; |
| b) | the balance, if any, shall be distributed by the claims officer to the claimants referred to in subsection (6) in accordance with the provisions of subsection (7); |
| c) | any amount not claimed within three years from the date of the first distribution of payments to claimants, shall accrue to the Financial Services Board. |
| 6) | The balance referred to in subsection (5)(b) shall be distributed to all claimants who are affected by the dealings referred to in subsection (1) and who prove to the reasonable satisfaction of the claims officer that-- |
| a) | in the case where the inside information was made public within a week after the individual referred to in subsection (1) dealt, they dealt in the same securities or financial instruments at any time after the individual referred to in subsection (1) so dealt and before the inside information was made public; |
| b) | in every other case, they dealt in the same securities or financial instruments on the same day as the individual referred to in subsection (1). |
| 7) | Subject to subsection (8), a claimant shall receive an amount-- |
| a) | equal to the difference between the price at which the claimant dealt and the profit gained or loss avoided as determined in terms of subsection (4)(b); or |
| b) | equal to the pro rata portion of the balance referred to in subsection (5)(b), calculated according to the relationship which the amount contemplated in paragraph (a) bears to all amounts proved in terms of subsection (6) by claimants, |
whichever is the lesser, unless the claims officer on good cause shown determines that the claimant should receive a lesser or no amount.
| 8) | Any amount awarded in proceedings contemplated in section 10 shall be deducted from any amount claimed in terms of this section. |
| 9) | Any person aggrieved by a decision of the claims officer, shall be entitled to be furnished with the reasons for the decision and may appeal against such decision to the board of appeal established by section 26 of the Financial Services Board Act. |
| 10) | Notification of amounts recovered in terms of this section, the administration of trust accounts, the procedure for the lodging and proof of claims and the distribution of payments in respect of claims shall be in accordance with rules made from time to time by the Financial Services Board. |
| 11) | The common law principles of vicarious liability apply to the civil liability established by this section. |
