Consob sanctions of €4.7 million ($5.1mn) hit two Dutch funds, Optiver (€2.5mn) and Flow Traders ($2.2mn) for short selling violations. In addition to the fine, €5 million (Optiver €2.7mn and Flow Traders €2.3mn) in allegedly illicit profits were also frozen, reported Milano Finanza.
In 2022, the two Dutch funds sold 1.5 million (Flow Traders) and 9.4 million shares (Optiver) on the market respectively “in the open and without having, in the ways required by law, the related availability of the securities”, a practice that is also called naked short selling.
Furthermore, the two funds “did not make any of the communications to the Authority and the public”, which include the number of shares shorted and the amount of the latter. In those few days of the capital increase, the stock had lost three-quarters of its value on the stock market.
The two sanctions are part of a broader international investigation that has been going on for some time, in which Consob has played a leading role. According to what MF-Milano Finanza has learned from market sources, however, the two sanctions may not be the only ones in the context of this investigation.
Read the full article (machine translated from Italian)