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Announcement: FMA imposes sanctions against a (former) securities trader of an Austrian bank for breaches against the Stock Exchange Act (BörseG)

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The Austrian Financial Market Authority (FMA) hereby announces that it has imposed a fine of EUR 42,000 against a former market maker and proprietary trader of an Austrian bank for infringements against the provisions on market manipulation pursuant to Article 48a para. 1 no. 2 lit. a Stock Exchange Act (BörseG; Börsegesetz).

The bank employee exploited his position to trade in a way that manipulated the market, by making use of the possibilities to execute securities transactions in a timely manner through the trading book of the bank. This was conducted with the objective of ensuring a profitable or loss-avoiding performance of a private portfolio held on behalf of a member of his family.

Transactions were executed in shares and turbo certificates using a portfolio held at another bank in the name of a third person concurrently with trading activities over the bank’s trading book. His employer was unaware of the existence of the portfolio at another bank.

This private portfolio profited from price movements that were deliberately brought about by concentrated buying and selling through the market maker or proprietary trading access of the bank.

The penal order is not final. The defendant has appealed. The procedure is pending at the Federal Administrative Court (BVwG).

Update: 19.09.2017

The Federal Administrative Court (BVwG) rejected the appeal regarding the issue of guilt, but however reduced the imposed fine to EUR 21,000 on the basis of the defendant’s altered financial circumstances. A final right of appeal has been excluded.

Update: 08.11.2017

The defendant has raised an extraordinary final right of appeal against the ruling of the Federal Administrative Court.

Aktualisierung vom 14.12.2017

The Supreme Administrative Court (VwGH; Verwaltungsgerichtshof) rejected the extraordinary final right of appeal on the grounds of there being no important point of law being raised.