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Administrative fine for late notification of short positions by AQR Capital Management LLC

Fine

On 28 April 2015, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €500,000 on AQR Capital Management LLC (AQR).

 
States of the legal proceedings
Fine imposed Objection Appeal Further appeal
Submitted Decision rendered Submitted Decisiion rendered Submitted Decision rendered
18-04-2015 (1)   

(1) The AFM's decision has since become final.

The administrative fine was imposed on AQR for violation of Article 5, first and second paragraph, and Article 6, first and second paragraph, in conjunction with Article 8, second paragraph, of Regulation No 236/2012 on short selling. During the period from 17 September 2013 to 16 October 2014, AQR failed to comply with its obligation to notify the AFM. During that period, it failed to make thirteen notifications of net short positions in Koninklijke Imtech N.V. in accordance with Article 5, first and second paragraphs, and Article 6, first and second paragraph, in conjunction with Article 9, second paragraph, of the Regulation. In addition, it failed to notify a net short position in Koninklijke Vopak N.V. in accordance with Article 5, first and second paragraphs, in conjunction with Article 9, second paragraph, of the Regulation.

Pursuant to the Regulation, net short positions of 0.2% of the issued capital of the relevant company and every 0.1% in excess thereof must be notified. Disclosure to the public takes place with respect to a net short position of 0.5% of the issued capital of the relevant company and every 0.1% in excess thereof. Notification and disclosure of these net short positions must take place at the latest by 15:30 hours the next trading day. However, periods of two and a half months to thirteen months passed between the moment AQR's short positions that should have been notified arose and the moment they were actually reported.

Notification of these short positions is mandatory in order to observe transparency concerning the interests in the relevant company. Notification enables the AFM to monitor whether short selling is used for abusive strategies and what consequences short selling has for a proper operation of the market. Notification of considerable short positions is necessary with a view of a stable financial market in which investors enjoy protection. The fact that the net short position of more than 0.5% in Koninklijke Imtech N.V. was not disclosed, means that essential information was withheld from investors. Consequently, they were denied the opportunity to be informed (correctly) and make a substantiated assessment of the financial instruments relating to this company.

Interested parties can submit the AFM's judgment contained in the 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).

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.

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