Bank of Lithuania fines for manipulation of securities market
The Board of the Bank of Lithuania fined G. J. €500 for market manipulation in AB Nasdaq Vilnius securities exchange in entering into unauthorised transactions of shares of AUGA group, AB, as well as submitting and revoking offers to enter into these securities transactions.
The Bank of Lithuania, carrying out the surveillance of trade, has established that, during the opening of a trade session of AB Nasdaq Vilnius on 4 December 2017, G. J. presented a large order for purchasing AUGA group, AB shares for €0.64 each, i.e. at a price by 16.4% larger than their close out value (€0.55) and better than the best purchasing order (€0.542). By this action he illegally raised the auction opening price. Two minutes before the start of the auction, he cancelled this purchasing order and one minute before the auction he presented an order to sell the shares for €0.569 each. These shares were purchased during the previous trade session. Having recorded the €0.57 price for the shares, G. J. sold the shares he had purchased during the previous trade session, at a profit.
Such actions are treated as market manipulation: they negatively affected the market and other investors. Due to such actions, the market received misleading signals of the demand and supply of shares, which misled other market participants with respect to the supply and demand, as well as the prices of shares.
The investor’s actions, as having the features of market abuse, were recorded by the system used by the Bank of Lithuania, which generates market abuse signals, and the monitoring system of Nasdaq.
Similar actions of this investor were also noticed earlier – on 7 November 2017, G. J. performed similar actions with the shares of AB Grigeo, but then it was confined to a strengthened monitoring of this person.
For market manipulation, a warning, making public the information on a violation and the person who makes the violation, also a fine of up to €5,000,000 can be imposed.
By imposing the fine, it was aimed at warning the person not to violate legal acts in the future, eliminating the benefit gained, as well as deterring other persons from similar violations.