On 3 November 2010, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of 600 euros on Mr. R. Rotgans, who acted as a portfolio manager under the name of Rob Wessels without possessing the required licence from the AFM. He managed his clients’ investment accounts in the context of an investment course he provided, and was paid for this by these clients. He operated illegally in the financial markets by offering financial services without possessing a licence for this.
Following reports from private individuals concerning possible illegal activities by Mr. Rotgans, and anonymous and other complaints identified on internet forums, the AFM started an investigation.
During the period from February 2008 until 21 August 2009, Mr. Rotgans offered a course on investing via internet. This training course focused on ‘day trading’, in which investors try to benefit from price fluctuations during the trading day.
Mr. Rotgans’ clients opened their own investment account. Mr. Rotgans subsequently invested in financial instruments using the money deposited by the students, who were to receive a guaranteed interest rate on their deposits from Mr. Rotgans. The students were to pay any higher profits realised by Mr. Rotgans to him. Disappointing results led to a lower balance on the investment account, and interest rates were based on that new balance. Mr. Rotgans traded in this manner for at least 18 clients. His clients gave Mr. Rotgans the freedom to manage their investment accounts and authorised him to invest these funds. The AFM therefore judged that Mr Rotgans acted as a portfolio manager with the practical course he offered.
Mr. Rotgans hereby contravened Section 2:96 (1) of the Dutch Financial Supervision Act (Wft). Under this provision, providers of investment services in the Netherlands must have a licence from the AFM. Mr. Rotgans did not have a licence for providing investment services. The legislature introduced a licensing system for investment services that aimed to guarantee the expertise and reliability of parties operating in this market, and thus protect consumer confidence in the financial markets.
By presenting himself as a portfolio manager without possessing an appropriate license issued by the AFM for this, Mr. Rotgans damaged confidence in the market.
This offence is subject to the old penalty law. The AFM has moderated the penalty from € 96,000 to € 600.
Interested parties can submit the AFM’s judgement contained in its decision to a court for a review.
If you have any questions or comments you can contact the Financial Markets Information Line on: 0900-5400 540 (5 eurocents per minute).
The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.
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