2012-03-05
The decision recognising that AB DNB bankas could misuse customer confidence remains in effect
On 5 March 2012, the Vilnius Regional Administrative Court rejected the complaint of AB DNB bankas and upheld the decision of the Securities Commission of the Republic of Lithuania of 28 July 2011, which made the conclusion on the basis of the data of the systemic investigation performed that AB DnB NORD bankas (now AB DNB bankas) could misuse investor confidence by distributing the bonds linked to stock indices or other assets, which were financed by the funds borrowed by the same bank, to unprofessional investors. In addition, according to the assessment of the Securities Commission of the Republic of Lithuania , AB DNB bankas was not ready to provide this type of services, as it did not have necessary procedures, arrangements and sufficiently qualified staff, and did not try to make sure that the product distributed by the bank meets the interests of unprofessional customers.
Owing to the completion of the prescription period, the Securities Commission of the Republic of Lithuania did not apply any enforcement measures to the bank, however, it publicly expressed its opinion about the bank’s actions, thus performing its duty to ensure efficient functioning of the markets in financial instruments and investor protection.
The court rejected the arguments of AB DNB bankas, by which it attempted to overturn the decision, as unfounded and upheld the above-mentioned decision of the Securities Commission of the Republic of Lithuania. Owing to the case hearing in camera, the motives of the court’s decision were not publicly announced.
The decision of the Vilnius Regional Administrative Court may be appealed against within 14 days from the date of judgement to the Supreme Administrative Court of Lithuania.
According to the Republic of Lithuania Law on the Reform of the Financial Market Supervision System, from 1 January 2012, the Bank of Lithuania participates in the litigations related to the former activity of the liquidated Securities Commission of the Republic of Lithuania and the Insurance Supervisory Commission of the Republic of Lithuania.