On 8 July 2011, the Netherlands Authority for the Financial Markets (AFM) imposed two administrative fines totalling €384,000 on MF Global for market manipulation. MF Global has its registered office in London. According to the AFM, by sending two announcements MF Global disseminated information that sends, or should be feared to send, an incorrect or misleading signal and it consequently violated the prohibition on market manipulation as referred to in Article 5:58, first paragraph, at d, of the Financial Supervision Act (Wft). The fine amounts to €192,000 per violation. The AFM mitigated both fines.
On 15 July 2008 and on 15 September 2008, an MF Global employee disseminated an announcement drawn up by him from the Amsterdam branch that contained incorrect and misleading information concerning a possible new issue of Fortis shares, the price of said shares to be issued and Fortis' capital requirement. The announcements were spread further by several MF Global employees. The information included in the announcements was emphatic, specific and detailed and was presented as fact. The announcements were sent to MF Global clients in the Netherlands and abroad and were reproduced by the media which meant that they became available to an even larger number of investors. This forced Fortis to issue a press release on two occasions announcing that there would be no new issue of shares.
The credibility of the announcements was strengthened by the unrest on the financial markets. The confidence inspired by the name MF Global also played a role.
The acts of the relevant employee can be attributed to MF Global. The dissemination of incorrect and misleading announcements by an MF Global employee seriously harmed the confidence in the financial markets and investors may have suffered losses as a consequence.
The AFM considers the violations to be very serious and highly attributable, as the dissemination of incorrect and misleading announcements by an MF Global employee seriously harmed confidence in the Dutch capital market in an already sensitive economic context.
Interested parties can submit the AFM's opinion contained in the decision to the courts for review.
If you have any questions or comments you can contact the Financial Markets Information Line on: 0800-5400 540 (free of charge).
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