In the U.S., we are pretty firm on the concept that "Ignorance of the law is no excuse." And I would argue the U.S. is even more firmly against the novel concept of "I knew about the law, but I just wasn't thinking about it at the time and now I'm sorry for violating it."

South Africa, however, has its own legal system, including its own securities regulator (called the Financial Services Board in South Africa) and its own insider trading laws -- all of which were on display in the Order issued last week by the FSB's Enforcement Committee against one Mr. Bernard Melvin Johnson.

According to the FSB, Johnson, an employee of Basil Read Holdings Limited, engaged in insider trading in May 2014. Johnson allegedly sold his shares of Basil Read stock after he learned that Basil Read had incurred large losses during the four month period ended April 30, 2014, and that the company expected to report even larger losses for the six month period ending June 31, 2014. The shares were sold "prior to the publication of the aforementioned information to the market," the FSB stated, in violation of South Africa's Financial Markets Act. Johnson also allegedly encouraged a third party to sell their Basil Read shares, as well.


According to the FSB's Order, Johnson agreed to settle the FSB's insider trading case against him by paying a penalty of R850 000 (approximately US$54,629 according to Google). I don't know where $54,629 falls on the insider trading penalty scale in South Africa, but the FSB's order was clear that it would have been higher if not for certain "mitigating circumstances." Specifically, the FSB noted in its Order and in its press release that 

In arriving at an appropriate penalty the Directorate took into account inter alia that the Respondent did not apply his mind to the applicable legislation prohibiting insider trading at the time of the contraventions and the implications of breaching these prohibitions. The Respondent subsequently realized the implications of his conduct and has since expressed regret for his actions.

Okay, then! I look forward to seeing whether any defendants in SEC enforcement actions here in the U.S. can have similar success using the "I did not apply my mind to the applicable legislation at the time (but now I'm sorry)" defense!