€25 thousand fine for trading during a closed period
The Bank of Lithuania concluded that Julius Kvaraciejus, chairman of the board of AB Pieno žvaigždės, who had indirectly conducted a transaction in the said company’s shares during a closed period, breached the provisions of the EU Market Abuse Regulation.
According to the aforementioned regulation, a person discharging managerial responsibilities within an issuer is not allowed to conduct any transactions on its own account or for the account of a third party, directly or indirectly, relating to the shares or debt instruments of the issuer or to derivatives or other financial instruments linked to them during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report.
The management of AB Pieno žvaigždės had no right to conduct such transactions from 27 August to 25 September 2018. However, the Bank of Lithuania found that, on 7 September 2018, R. K., natural person, acquired 72,279 shares valued at €78,061.32. It was also found that funds to carry out this transaction (€80 thousand) were provided by Julius Kvaraciejus, thus breaching the provisions of the EU Market Abuse Regulation regarding the prohibition for a person discharging managerial responsibilities to conduct any transactions during a closed period. The infringement established by the Bank of Lithuania was subsequently reported by investors.
By resolution of the Board of the Bank of Lithuania, Julius Kvaraciejus was imposed a €25 thousand fine.
In Lithuania, the provisions of the Market Abuse Regulation apply from 28 June 2017. The Bank of Lithuania has repeatedly drawn market participants’ attention to the changed legislation and sanctions to be imposed for non-compliance with the requirements set out in this regulation. The maximum fine for the infringement of the prohibition to trade during a closed period is EUR 500 000.
J. Kvaraciejus has challenged the Resolution of the Board of the Bank of Lithuania at the Vilnius Regional Administrative Court.