Stockholm, October 29, 2013 - The Disciplinary Committee of NASDAQ OMX Stockholm AB (“the Exchange”) has found that HCS Holding AB (“HCS”), whose shares are traded on First North, has contravened the First North Nordic Rulebook (“the Rulebook”) in respect of disclosures and has ordered HCS to pay a fine of SEK 100,000 corresponding to two annual fees.
The case concerns HCS’s violation of Items 4.13 (a) and 4.13 (d) of the Rulebook.
According to the investigation, abnormal price movements in the HCS share were noted on the morning of April 3. The Exchange contacted the company’s Certified Advisor (“CA”), who was asked to check with the company whether the price movements had any connection with any potentially unpublished price-sensitive information. After the CA had contacted the company’s Chief Financial Officer (“CFO”), the Exchange was informed that this was not the case.
In view of this information, the Exchange had no reason to suspect a leak of price-sensitive information and thus to take action in the form of a trading halt.
Shortly thereafter on the same day, HCS published a press release that contained price-sensitive information regarding one of HCS’s wholly owned subsidiaries. The company’s share price had risen 20 percent during the morning until the time at which the press release was published. Following publication of the release, the share price rose an additional 50 percent to end at the day’s high. The publication of the press release had been delayed due to technical problems.
The Disciplinary Committee is of the opinion that it is probable that the abnormal price movements on the morning of April 3, 2013 were due to the news regarding the subsidiary having been leaked.
The Disciplinary Committee has no reason to question HCS’s attempts to minimize advance knowledge of the transaction in question and that thus not even the company’s own CFO knew about the transaction, which is why this factor, in itself, cannot give rise to any objection. However, the company’s procedures should have ensured that the President or Chairman of the Board was informed when the company was informed about the abnormal price movements, which did not happen.
Accordingly, the Disciplinary Committee finds that the company contravened its obligation to keep its CA informed of the company and its operations and to provide all such information necessary for the CA to fulfill the company’s obligations in accordance with the Rulebook. Once it was known that publication of a press release could not, due to technical problems, take place in close connection with the receipt of the signed agreements, the company should also have contacted its CA and the Exchange.
The violations are deemed neither negligible nor excusable. Accordingly, the company is to be subject to disciplinary sanction.
A more detailed description of the case and the Disciplinary Committee’s ruling is published on:
Participating in the Committee’s ruling were former Supreme Court Justice Johan Munck, Supreme Court Justice Marianne Lundius, Professor Emerita Madeleine Leijonhufvud, Company Director Carl Johan Högbom and Company Director Stefan Erneholm.
About the Disciplinary Committee
The role of NASDAQ OMX Stockholm’s Disciplinary Committee is to examine cases where Exchange Members or listed companies have breached the rules and regulations applying on the Exchange. If NASDAQ OMX Stockholm suspects that a member or a listed company has acted in breach of NASDAQ OMX Stockholm’s rules and regulations, the matter is reported to the Disciplinary Committee. NASDAQ OMX Stockholm investigates and prosecutes the case and the Disciplinary Committee assesses the case and issues a ruling regarding possible sanctions. The sanctions possible for listed companies are a warning, a fine or delisting. The fines that may be imposed range from one to 15 annual fees. The sanctions possible for Exchange Members include a warning, a fine or debarment. The fines imposed by the Committee are not included in the Exchange’s business but are attributed to a foundation supporting research in the securities market. The Disciplinary Committee's Chairman and Deputy Chairman must be lawyers with experience of serving as judges. At least two of the other members of the Committee must have in-depth insight into the workings of the securities market.
Members: Former Supreme Court Justice Johan Munck (Chairman), Supreme Court Justice Marianne Lundius (Deputy Chairman), Professor Emerita Madeleine Leijonhufvud, Company Director Stefan Erneholm and Company Director Anders Oscarsson. Deputies: Former Authorized Public Accountant Bo Magnusson, Lawyer Wilhelm Lüning, Company Director Jack Junel, Ragnar Boman (MBA) and Carl Johan Högbom (MBA).
Christina Malmberg Hägerstrand
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