The Netherlands Authority for the Financial Markets (AFM) has imposed an administrative fine of €120,000 on Mr S.R. Kooij. He was de facto in charge of the illegal offer of investments by Ontwikkeling Vastgoed Nederland B.V. (OVN) in the period of 01 June 2010 to 23 November 2010. This undertaking offered parcels of land to consumers, speculating that the value would increase as a result of a change to the zoning plan.
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OVN promised a return by speculating on an increase in the value of these parcels of land. The management of the land was performed by a party other than the investor, and this therefore constitutes offering investments. This requires a licence according to Section 2:55 of the Financial Supervision Act (Wft).
It is important that financial service providers hold an AFM licence. A licence offers protection to consumers. Before the AFM grants a licence, it checks, inter alia, whether a financial service provider complies with the requirements of properness, expertise and integrity. Moreover, a service provider that holds a licence must comply with the so-called continuous rules of conduct. These concern, inter alia, careful services to consumers.
De facto management by Mr Kooij
As OVN sales leader, Mr Kooij was directly involved in the infringement. For example, he was involved, inter alia, in the purchase and sale of land, sales techniques and the internal management thereof.
The AFM established during its investigation that Mr Kooij was aware of OVN's offer, that he was authorised and reasonably obliged to terminate these offers and that he failed to take measures to that effect. These are criteria developed in case law for assuming de facto management of a violation. Persons who are not registered in the Commercial Register of the Chamber of Commerce as officers of the company, such as Mr Kooij, can also be de facto in charge of such an infringement.
A basic amount of €2,000,000 applies for this type of infringement. The basic amount can be increased or decreased if the seriousness or duration of the violation or the degree of culpability give cause to do so. In addition, the AFM also takes account of the extent of the equity of the infringing party when determining the amount of the fine. The AFM may furthermore mitigate the fine if the financial capacity of the infringing party gives reason to do so. The AFM sees reason to increase the basic amount on the basis of increased culpability. The AFM has set the fine at €125,000 on the basis of the personal assets of Mr Kooij. The fine was mitigated from €125,000 to €120,000 pursuant to a decision on an appeal submitted by Mr Kooij based on financial capacity.
The interested parties has submitted the AFM's decision to the courts for review. The court upheld the AFM's decision. The interested party can submit an appeal against the court's decision.
If you have questions or complaints, please contact the AFM's Financial Markets Information Line: 0800 - 5400 540 (free of charge).
The AFM is committed to promoting fair and transparent financial markets.
As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.