Probe into ma­nip­u­la­tion of bank chips

Huge fines await for­eign in­sti­tu­tional in­vestors found to have bro­ken naked short sell­ing reg­u­la­tions

Kathimerini English - - Focus - BY ANESTIS DOKAS

The Cap­i­tal Mar­ket Com­mis­sion is in­ves­ti­gat­ing 150 stock trans­ac­tions that took place last spring and are sus­pected of hav­ing bro­ken reg­u­la­tions on naked short sell­ing as for­eign in­vestors are be­lieved to have sold bank stocks they did not in fact own in an aim to de­value them. Huge fines are ex­pected to be handed out early next year.

“We are ex­am­in­ing 150 in­stances of trans­ac­tions in shares of the four sys­temic banks that were com­pleted im­me­di­ately after their share cap­i­tal in­creases in April and May 2014,” the com­mis­sion’s head, Con­stanti­nos Bo­topou­los, re­vealed yes­ter­day.

“All cases con­cern trans­ac­tions by for­eign in­sti­tu­tional in­vestors who made sus­pi­cious trans­ac­tion in the shares of the four banks, as the in­ves­ti­ga­tion shows that they sold stocks they did not pos­sess,” added Bo­topou­los.

The probe


prof­i­teer­ing through de­val­u­a­tion has been go­ing on for some months now and the first fines are ex­pected to be im­posed in Jan­uary 2015. Bo­topou­los ex­plained that “vi­o­la­tors will be pun­ished with mam­moth fines of up to 50 mil­lion euros. The in­ves­ti­ga­tion into the shares of one of the four sys­temic banks has al­ready been com­pleted.”

The probe into stock ma­nip­u­la­tion through naked short sell­ing con­cerns the days just be­fore the list­ing of the new shares stem­ming from the lenders’ share cap­i­tal in­creases, fol- low­ing huge losses and high trad­ing vol­umes in the mar­ket with the use of the T+3 rule (Trans­ac­tion day plus three days) that ap­plied at the time.

For in­stance, in Na­tional Bank’s case, four days be­fore the in­tro­duc­tion of its new stock 16,635,648 shares were traded, re­sult­ing a 3.2 per­cent de­cline. The fol­low­ing day the vol­ume soared to 82,122,701 shares, with a 10.74 per­cent de­cline.

In the case of Eurobank, its stock started the year at a price of 0.553 euros. One day be­fore the an­nounce- ment of the share cap­i­tal in­crease (on April 3), it was at 0.458 euros with 1,977,237 shares chang­ing hands. Four days be­fore the list­ing of the new stock on May 2 the price stood at 0.483 euros, but the av­er­age daily vol­ume in the month from April 3 to May 2 had soared to 18,454,113 shares. One day after the new stock was listed (May 7) its pic­ture changed: The price fell to 0.384 euros, shed­ding 20.5 per­cent from May 2 with av­er­age vol­ume at 100,515,812 shares per day.

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