CMA launches fraud unit

May 13, 2009

, NAIROBI,Kenya, May 13 – In a move aimed at enhancing its market supervision capacity, the Capital Markets Authority (CMA) has established a Capital Markets Fraud Investigation Unit (CMFIU).

In a statement issued on Wednesday, the CMA Chief Executive Stella Kilonzo said the setting up of the CMFIU is underpinned by the recognition that as the market develops, securities fraud and other related irregularities get more sophisticated.

The unit comprises senior officers seconded from the Criminal Investigation Department, specialising in economic and cyber crime.

‘’We have observed a trend which points to a surge in fraud-related cases in the recent past. The establishment of CMFIU is part of our efforts to enhance our market supervision capacity as we respond to the challenges posed by fraud,’’ said Mrs Kilonzo.

The CMA Chief Executive explained that the CMFIU will in particular investigate all cases related to fraud including; impersonation, diversion of investor funds, and employee pilferage in market intermediaries, with a view to building evidence for prosecuting offenders.

“The unit will go beyond security and proactively manage the risk associated with fraud through prevention, detection, and response,” added Mrs Kilonzo.

She said that the establishment of the unit is expected to fast-track prosecution of reported fraud-related cases.

Mrs Kilonzo observed that CMA will train the CMFIU officers in securities fraud and other irregularities, locally and abroad.

“This approach is informed by the recognition that capital markets fraud-related incidences are unique in nature and we require well equipped officers to stem the tide of rising cases,’’ added Mrs Kilonzo.

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