Stockholm, December 11, 2014 – The Disciplinary Committee of Nasdaq Stockholm (“the Exchange”) has found that Länsförsäkringar Bank AB (“the Bank”) has contravened the Exchange’s trading regulations – the Nasdaq Nordic Member Rules (“NMR”) – and issues a warning to Länsförsäkringar Bank AB.
The case concerns Länsförsäkringar Bank’s violation of items 4.6.1 and 4.9.3 of the Rulebook. Länsförsäkringar Bank has brokered an order that did not reflect the prevailing market value of the common shares of Victoria Park AB.
On May 14, 2014, due to a bonus issue, the common shares of Victoria Park AB were to be traded ex-rights to Class B common shares, at the same time as the existing common shares were to be renamed Class A common shares. All other factors remaining equal, this bonus issue would have meant that the price of one Class A share would theoretically correspond to one third of the closing price of the common share on May 14, 2014. Accordingly, given a closing price for the common share of SEK 20.40 on May 13, 2014, the Class A share was expected to be worth approximately SEK 6.80 on the morning of May 14.
On May 14, 2014, at 08:00:01, Länsförsäkringar Bank AB placed a buy order in the system at a price of SEK 20.30.
Since the price of this order was three times higher than the expected price, the Exchange repeatedly attempted to contact Länsförsäkringar AB. It was not until just before the Exchange was due to open that the Exchange managed to contact the Bank. Despite this, the incorrect order remained in place when the Exchange opened, leading to an opening price of SEK 20.30. Since the share continued to be traded at incorrect levels after the opening, the Exchange decided to suspend trading in the share, and to cancel the incorrect trades.
The Bank has stated that it had been given very little time to correct the stated order, which would have been facilitated had the Exchange immediately contacted the right person, and that the Bank had asked the Exchange to cancel the order, which the Exchange declined.
The Disciplinary Committee finds it established that the Bank brokered an order that did not reflect the prevailing market value of the common shares of Victoria Park AB and that this constituted violation of two items of the Rule Book. However, the Committee was unable to establish that the Bank had been delinquent in its technical and administrative preparations. Even considering the fact that the Exchange had previously directed criticism at Länsförsäkringar Bank in a similar matter, the Disciplinary Committee finds that what occurred may be considered of a minor nature and finds its sufficient to issue a warning.
A more detailed description of the case and the Disciplinary Committee’s decision is published on:
Participating in the Committee’s decision were former Supreme Court Justice Johan Munck, Supreme Court Justice Marianne Lundius, Professor Emerita Madeleine Leijonhufvud, Company Director Anders Oscarsson and Company Director Jack Junel.
About the Disciplinary Committee
The role of Nasdaq Stockholm’s Disciplinary Committee is to consider suspicions regarding whether Exchange Members or listed companies have breached the rules and regulations applying on the Exchange. If the Exchange suspects that a member or a listed company has acted in breach of the rules and regulations, the matter is reported to the Disciplinary Committee. The Exchange investigates the suspicions and pursues the matter and the Disciplinary Committee adjudges the matter 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 are a warning, a fine or debarment. Fines levied by the Disciplinary Committee are not credited to the Exchange’s business; they 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 emirita 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).
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