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Stockholm Stock Exchange’s disciplinary committee fines companies


Stockholm Stock Exchanges disciplinary committee fines companies Intentia International AB and Karolin Machine Tool AB (KMT) have both breached the listing agreement with Stockholm Stock Exchange. Intentia has released information with an impact on the companys share price without disclosing it in the correct manner. KMT did not comply with the rules governing the disclosure of benefits for senior executives when preparing its annual report for 2003 and also disregarded certain accounting regulations. Stockholm Stock Exchanges disciplinary committee has ruled that Intentia be fined SEK 192,000 and that KMT be fined SEK 384,000. Intentia In accordance with the rules of the listing agreement, information that could affect the price of a companys shares may not be disclosed in a manner other than via general publication. This entails that the information must be sent to national daily newspapers, news agencies and Stockholm Stock Exchange simultaneously. On July 23, 2004, in conjunction with the presentation of the companys six-month report, Intentias President and Chief Executive Officer divulged to a journalist exact details of Intentias consulting and operating margins for the forthcoming fourth quarter. This information was not disclosed in the manner stated in the listing agreement. In addition, on October 27, 2004, in conjunction with a telephone conference concerning the companys nine-month report, the President and Chief Executive Officer divulged information with an effect on the price of the companys shares that was of a forecast nature regarding Intentias earnings for 2005. Nor was this information disclosed correctly. The Disciplinary Committee has concluded that Intentia breached the listing agreement on these occasions and ruled that the company be fined the equivalent of one annual fee. KMT According to the listing agreement, exchange-listed companies are obliged to comply with the Annual Accounts Act and the Financial Accounting Standards Councils recommendations, among other regulations, when preparing annual reports. Companies must also comply with Swedish Industry and Commerce Stock Exchange Committees (NBK) rules concerning information about benefits for senior executives. Based on an investigation conducted by the panel for monitoring financial reporting (the Review Panel), Stockholm Stock Exchanges disciplinary committee has concluded that information about benefits for senior executives in KMTs annual report for 2003 was not disclosed in accordance with NBKs regulations. In addition, KMT disregarded the Annual Accounts Acts rules concerning goodwill amortization and three of the recommendations issued by the Financial Accounting Standards Council. Accordingly, the Disciplinary Committee concluded that KMT had also breached the listing agreement. The deficiencies concerning the NBK regulations were also a repeat of failures committed when the company prepared its annual report for 2002. The Disciplinary Committee ruled that KMT pay a fine corresponding to two annual fees. Disciplinary Committee The role of the Stockholm Stock Exchanges Disciplinary Committee is to consider suspicions regarding whether Exchange Members (i.e. banks and brokerage firms) or listed companies have breached the rules and regulations applying on the Exchange. If Stockholm Stock Exchange suspects that a member or a listed company has acted in breach of Stockholm Stock Exchanges rules and regulations, the matter is reported to the Disciplinary Committee. Stockholm Stock Exchange investigates the suspicions and pursues the matter and the Disciplinary Committee 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 ten annual fees. The sanctions possible for Exchange Members are a warning, a fine or debarment. 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: Supreme Court Justice Johan Munck (Chairman), Supreme Court Justice Marianne Lundius (Deputy Chairman), Madeleine Leijonhufvud (professor), Stefan Erneholm (company director) and Hans Mertzig (company director). Deputy Members: Hans Edenhammar (MBA), Claes Beyer (lawyer), Jack Junel (company director), Lars Östman (professor) and Ragnar Boman (MBA). For more information, please contact Anders Ackebo, Senior Vice President Surveillance OMX Exchanges/Stockholm Stock Exchange, +46 8 405 70 10 Ulf Lindgren, Senior Legal Councel, Stockholm Stock Exchange, +46 8 405 70 60 About OMX Exchanges: OMX Exchanges is a division of OMX. OMX Exchanges operates the stock exchanges in Stockholm, Helsinki, Tallinn, Riga and Vilnius, as well as the central securities depositories in Estonia and Latvia. Via OMX Exchanges, customers are offered access to 75 percent of the Nordic and Baltic securities market. PDF

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