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Swedish financial institutions accused in Norway of short selling. Matter referred to the Norwegian financial supervisory authority



  

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Thursday, 30 June 2011
Norway's financial supervisory authority, Finanstilsynet, has made a complaints against Swedish bank, Handelsbanken and several financial firms for breaching rules on short selling of securities.

There are four finance companies involved and it includes Handelsbanken, which the Norwegian financial police have reported to the Economic Crimes Bureau in Norway. They are accused of having engaged in so-called naked short selling, in the Norwegian shares RXT, Reservoir Exploration Technology.

Naked short sale led to significant and persistent "delivery problem" of the RXT-shares, writes Financial authority in a statement.

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Financial Services Authority has taken a serious view on the matter and believes that just only criticism of the companies is not enough. They have on several other occasions been investigated and been criticized for having engaged in the prohibited trade practices.

In Sweden, all forms of short selling of shares are allowed, even naked short selling if it occurs during the trading day. Naked short selling means that a share is sold without first borrowing.
Investopedia explains Naked Shorting that shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.

Although Nordea Bank Norway, Swedbank - owned First Securities and Norwegian Fondsfinans have been reported to the police when they are not considered to have had sufficient control over the customers actually owned or had access to the shares sold by them.
By Scancomark.se Team


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