Saudi Arabia Pulls Ernst & Young's Securities License

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Saudi Arabia's Capital Market Authority, or CMA, said Sunday it revoked the securities-business license of Ernst & Young because of "several violations" of the kingdom's capital market law and implementing regulations, Zawya Dow Jones reported.

Ernst & Young Saudi Arabia Consulting was given a license to arrange and advise on activities in the securities business in the Arab world's largest economy in May 2006, CMA said in a statement posted on the Saudi bourse Web site. Ernst & Young wasn't immediately available for comment.

In recent months, the oil-rich kingdom's market regulator has asserted more control over the stock market, the Persian Gulf's best performer this year so far, in an effort to stamp out manipulative and speculative trading and attract more stable institutional and foreign investors.

The CMA issued its first prison sentence in August, locking up the former chairman of Bishah Agricultural Development Co. for three months, and it fined Prince Ahmed bin Khaled Al Saud, the chairman of Saudi Chemical Co., for disclosure violations in October.

The Tadawul, as Riyadh's stock exchange is known, has long been closed to the rest of the world through stringent foreign investment rules and has remained dominated by local retail investors.

Listed companies in Saudi are worth about $319 billion, almost as much as the rest of the Gulf markets combined.END