An employee of SEB Enskilda appears in court, charged with the misuse of inside information
A financial analyst who worked at the investment union AS SEB Enskilda, and his acquaintance, earned unlawful profit by misusing inside information related to the takeover bid of TeliaSonera AB.
The misuse of inside information has been proved in the course of pre-trial criminal procedure. The Financial Supervision Authority and law enforcement authorities managed to seize the unlawful profits.
“Never before has a case of the misuse of inside information reached court in Estonia. The basis for the precedent is undoubtedly the efficient and smooth cooperation between the Financial Supervision Authority and the Prosecutor’s Office during the entire criminal procedure. Unfortunately, the belief that our securities market is not misused due to its small size has turned out to be a myth,” Kilvar Kessler, Member of the Management Board of the Financial Supervision Authority, commented.
24. On 24 August 2009, TeliaSonera published an announcement through the information system of NASDAQ OMX Tallinn Exchange regarding the intention of making a takeover bid to all shareholders of AS Eesti Telekom with a purchase price of EEK 93 per share, and through the information system of Vilnius Stock Exchange to all shareholders of TEO LT (former Lithuanian Telekom) with a purchase price of LTL 1.83 per share. Before the publication of the announcements by TeliaSonera, the market price of a share of Eesti Telekom was EEK 75 and the market price of a share of TEO LT was LTL 1.4. After the publication of the announcements of TeliaSonera, the prices of shares on the market increased by 23% and 30%, respectively.
The financial analyst Dmitri had, due to his job, access to information about the price of the takeover bid of the shares of Eesti Telekom and TEO LT before the publication of this information. His acquaintance purchased both shares and call options of TEO LT and the call options of the share of AS Eesti Telekom at the time when the price of the takeover bid was not published yet.
In September 2009, the Financial Supervision Authority presented a report of criminal offence to the Northern Circuit Prosecutor’s Office on the basis of its procedural acts with the purpose of initiating a criminal procedure in the matter of the crime of the misuse of inside information. The Northern Circuit Prosecutor’s Office presented to the court a compromise procedure with elements of misuse of inside information in Dmitri’s case on 5 November 2009.
The Financial Supervision Authority, the police and the Prosecutor’s Office renewed their cooperation agreement on 28 September 2009. The Financial Supervision Authority is ready to support the criminal procedures conducted by the Prosecutor’s Office with its know-how in the future, in so far as the Financial Supervision Authority does not conduct criminal procedures as provided by law.