On 07 July 2014, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €15,000 on a natural person, hereinafter 'the Offender', because he manipulated the price of participating interests in a fund. This means that he violated Section 5:58(1) of the Financial Supervision Act (Wft).
At the start of 2012, the Offender held one participating interest in the investment fund Sabon FunDing, which was listed at Euronext at the time. Mr B.C. Ultee held a large number of participating interests. The Offender had become acquainted with Mr Ultee at participants' meetings.
Mr Ultee transferred several participating interests to the Offender in January 2012 without receiving payment in return. The Offender sold those participating interests back to Mr Ultee a little over a month later and paid the proceeds thereof largely back to Mr Ultee. This means that the transactions were almost cost-neutral on balance.
The AFM has established that the securities actually always remained under the control of Ultee. The Offender used the transactions to create the impression that the fund was being traded, while there was no change from an economic perspective and, moreover, the transactions led to an artificially high price level. This constitutes market manipulation.
The Offender did first attempt, as was demonstrated by him, to transfer the participating interests back to Mr Ultee via the bank and only sold them via the stock exchange under pressure from Mr Ultee until it became clear that this could not be done in time. This makes the offence less culpable.
Amount of the fine
A basic amount of €2 million applies for this offence. The AFM reduced this amount by 25 percent on the basis of reduced culpability (see above). When determining the amount of the fine, the AFM also takes into account the financial capacity of the offender. Said financial capacity is reason to reduce the fine to €75,000 in the present case. The fine was further reduced to €15,000, because the AFM considers a fine of €75,000 unreasonably high taking all circumstances into consideration.
Interested parties can submit the AFM's decision to the courts for review.
If you have questions or complaints, please contact the AFM's Financial Markets Information Line: 0800 - 5400 540 (free of charge).
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