OMX Surveillance Monthly report November 2008 Stockholm The Disciplinary Committee of NASDAQ OMX Stockholm has during November decided upon one case regarding HQ Bankaktiebolag, and one of its employees. The member had placed buy orders during an opening call for H&M to such extent that the exchange argued that the equilibrium price disseminated during the call auction was rendered misleading. Before the call auction ended the member withdrew its orders and the exchange argued that the orders had never been intended to be traded upon. The Disciplinary Committee concluded that the circumstances supported the arguing of the exchange, but that the explanations given by the member could not be disregarded. The Committee decided not to impose any sanction. The Exchange has criticized one company on the main market. The case concerned a company that held an analyst meeting after having published its Q3 report and at the meeting presented non public information about the company s development during the start of the fourth quarter. The company was criticized since the exchange stated that the information was deemed to be of possible price sensitive nature and as such should have been published in accordance with the applicable rules, for instance in the Q3 report. Written criticism has been issued towards two members. The first case concerned a situation where the member had quoted totally erroneous prices for warrants issued by the member and where the member first discovered this after an unreasonably long time had passed. The member claimed that the trades that had taken place should be cancelled. The exchange clarified the responsibilities of members and of the exchange respectively in such situations. The second case concerned a share repurchase that a member had executed on behalf of a listed company. The company had instructed the member that the repurchase should be done in compliance with the exchange's rules. The member executed the transactions by first buying the shares in the market in a principal capacity and subsequently completing trades against the listed company, at the average price of the market for the period that the trading had taken place. The procedures applied are not supported by the exchange's rules, since every transaction must be completed within the spread of the order book at the time of the trade. Furthermore, the discovery of the error was delayed by the fact that the member initially failed to report the transactions to the exchange in the prescribed manner. During the month, ten cases have been handed over to the Swedish Financial Supervisory Authority, subsequent to the exchange's obligation according to Swedish law to report matters of suspected market abuse. One of these cases concerned suspected illegal insider trading and the remaining nine concerned suspected market manipulation. Apart from that, two referrals have been made regarding cases where the levels of suspicion were lower.
2(6) The trading in the shares of Carnegie AB was halted in connection with the publication of information regarding the investigation that the Swedish FSA had made regarding Carnegie. The shares in Lundin Mining Corporation were transferred to the observation segment after the company having announced that HudBay Minerals Inc. and Lundin Mining Corporation have agreed to a business combination. The current rules state that a listed company will be placed on the observation segment if the company is subject to a reverse take-over or otherwise plans to make or has been subject to an extensive change in its business or organization so that the company upon an overall assessment appears to be an entirely new company. The shares in Q-Med AB and Teleca AB were placed on the observation segment due to the fact that Ivytan AB and Symphony Technology Group LLC had announced public offers to the shareholders of the companies. The shares in AcadeMedia AB were placed on the observation segment on October 23rd, 2007 because the company was subject to a public offer from Bure Equity AB. After the public offer was finalized the shares of AcadeMedia continued to be traded on the observation segment due to the fact that the company did not fulfill the listing requirement regarding free float and distribution of shares. Bure Equity later decided to distribute its shares in AcadeMedia to its shareholders. That transaction has now been completed and an updated owner register in Academedia now shows that the listing requirements regarding free float and distribution of shares are fulfilled. For this reason the shares in Academedia were during November transferred back to their ordinary position. Surveillance of financial reporting 2008 During the month (full year) the Exchange has sent the following number of closing letters to companies whose reports have been subject to special examination. Category 1 2 3 4 Annual report (shares) 1 (16) 1 (26) 0 (0) 0 (0) Interim reports (shares) N.A. 0 (2) 0 (0) 0 (0) Annual reports (bonds) 0 (6) 0 (4) 0 (0) 0 (0) Interim reports (bonds) N.A. 0 (0) 0 (0) 0 (0) Follow-up / other cases N.A. 1 (3) 0 (0) 0 (0) Category 1 - no remarks. Category 2 - remark regarding disclosure. Category 3 - criticism. Category 4 - statement of reprimand to the disciplinary committee. Helsinki One company received a reprimand from the secretary of the Disciplinary Committee. The company did not disclose a profit warning without undue delay. The company was also criticized, because the company did not inform the exchange in advance before the information was disclosed.
3(6) One company was criticized for not having delivered a stock exchange release regarding a regulatory approval of a business acquisition simultaneously to the exchange as it was disclosed to the media. One company was criticized for not having disclosed a postponement of a project without undue delay. One member was criticized concerning acquisitions of a listed company s own shares. The member had acquired more shares than allowed and the member had also disclosed some already acquired amounts incorrectly. It was stated that the breach of the rules was repetitive and severe, but since the member's operations will be closed down, the exchange will not take the case to the Disciplinary Committee. Four cases of suspected market manipulation and one case of possible abuse of insider information were transferred to the Finnish Financial Supervision Authority. The trading with the shares in Stromsdal Oyj was suspended on the company's request. The company disclosed later the same day that its letter of intent regarding a major corporate and financial restructuring had failed and the Board of Directors had decided to file for bankruptcy. The shares of Stromsdal Oyj was already since October 14, 2008, traded on the observation segment because the company had announced that its finance situation had become very tight and the company had started negotiations with its bankers. Copenhagen Comendo A/S was given a reprimand because the company did not publish an annual financial statement based on an audited financial statement within 3 months after the end of their financial year, in accordance with rule 3.2.2 in the Rules for issuers of shares. One company received a reprimand for not publishing an announcement regarding the annual general meeting immediately after the end of the annual general meeting in accordance with rule 3.3.3 and 3.1.3 in the Rules for issuers of shares. Matching halts were initiated in a number of UCITS Funds on the Fund Market due to the fact that it was no longer possible for the funds to calculate prices as local Russian stock exchanges had been closed down due to decline in prices. The matching halts were in force until the exchanges opened again. Following the opening of the exchanges it was again necessary to initiate matching halts on the funds due to increasing prices. The shares in Ebh bank A/S were transferred to the suspension list, where all shares are listed in which the trading has been halted for more then one day, due to the fact that the bank had announced that the bank s solvency was significantly below the minimum requirement in the Financial Business Act. The shares in Curalogic A/S were transferred to the observation segment due to the fact that the company had announced that the Board of Directors had decided to recommend a liquidation of the company and that the assets would be returned to its shareholders. The Board of Directors will as soon as possible call for a General Meeting where the proposal of liquidation will be put forward.
4(6) The shares in FormueEvolution II A/S were transferred to the observation segment due to the fact that the company had announced that the board had reevaluated the capital in the company. Furthermore, the company announced that after regulation of the tax assets the company's equity equals DKK 25.66 million, which is less then 50% of the share capital. The shares in Renewagy A/S were transferred to the observation segment due to the fact that the company announced that it expects to merge with Colexon Energy AG with Colexon Energy AG as the continuing company. The merger is subject to approval on the first coming general meetings in the two companies. Furthermore, Renewagy announced that the company expects to be delisted in connection to the merger. The shares in Søndagsavisen A/S were removed from the observation segment due to the fact that Søndagsavisen announced that their sale of Gratistidningar i Sverige AB had been approved by the Swedish Competition Authority. Thereby the transaction was completed and the sales process of both Norsk Avisdrift and Gratistidningar i Sverige AB was concluded. The Landic Property Bonds IX were removed from the observation segment after the issuer had announced that it had received confirmation that the non compliance with a certain undertaking under the facility agreement had been waived. Iceland A bond issuer was criticized for delayed publication of its interim financial statement. According to the disclosure rules an issuer must publish interim financial statements for the first six months of its operating year, as promptly as possible following the conclusion of the period and no later than two months after its conclusion. Three cases were reported by the Exchange to the FSA. One case concerned a suspicion of a breach of the regulation on insider trading and one case concerned a suspicion that best execution rules had been breached. The third case concerned possible price manipulation and breach of rules regarding announcements of insider trading. The bonds issued by Milestone ehf. were moved to the observation segment due to uncertainty concerning the future of the issuer, with reference to an announcement from the company regarding its payment difficulties. Tallinn Nothing to report Riga The Riga Stock Exchange (RSE) management board has resolved to impose a warning to AS Liepājas autobusu parks (LAP1R) since the company had breached the RSE rules by not, without delay, informing the exchange about changes in its management board. According to the rules the issuer shall send, without delay, a notification to the Exchange if any of the persons specified in the rules files a resignation or terminates his/her contractual relations with the issuer.
5(6) Trading halts were implemented twice during the month. The shares of AS Liepājas Metalurgs (LME1R) and AS Nordeka (NKA1R) were halted due to the publication of different types of price sensitive information in the media prior to the information being published in accordance with the RSE rules. Trading was resumed immediately after the information was published through the Exchange s disclosure system. Surveillance statuses were assigned three times during the month. Surveillance status were assigned to AS Baloži (BLZ1R) due to the fact that the up-coming AGM was gong to decide upon a proposition to delist the company from the regulated market and to International Equity Funds fund (BAMIAFFR) and Government Bond fund (BAMGOBFR) as IPAS Invalda Asset Management Latvia had informed the RSE on its decision to start the liquidation process of these two funds. The RSE has informed the Financial and Capital Market Commission regarding the above mentioned surveillance cases. Vilnius The Vilnius Stock Exchange (VSE) has issued criticism towards one company combined with a request to confirm or deny press information that the sales of the company had decreased by 19 % in comparison with the same period the previous year. The company contradicted the information and informed that the business trends of the company had not changed and that the company expected sales revenue growth for January - September of 2008. The trading in the shares of Linas AB and Klaipedos Juru Kroviniu Kompanija AB was halted. Linas AB had failed to announce material information about that the Supreme Administrative Court of Lithuania had rejected the appeal from the shareholder Lione Lenciauskiene and left the decision from Vilnius District Administrative Court unchanged. Klaipedos Juru Kroviniu Kompanija AB had failed to announce material information about that a tax dispute between the company and the state tax inspectors had ended in an agreement which meant that the company had to transfer Lt 4,225 million (EUR 1,224 million) to the State treasury. The trading was in both cases resumed after the essential information had been disclosed via the information disclosure system. The shares in Dvarcioniu Keramika AB have been put on surveillance status after the company had announced that the main shareholder - Cersanit S.A.- have an intention to announce a mandatory takeover bid in respect of the remaining ordinary registered shares of the company. First North NanoCover A/S, Wannakey A/S, Danventures A/S and Deadline Games A/S received reprimands for not publishing adequate semi annual reports in accordance with rule 4.6, in the First North Rulebook. The Certified Advisers (CA) Korral Partners A/S and Philip & Partnere A/S received reprimands for not adequately ensuring, that the companies that they acted as CA for were familiar with the rules in the First North Rulebook as described above. One Danish First North company received a reprimand for not publishing the decisions of the extraordinary general meeting immediately after the conclusion of the meeting in
6(6) accordance with rule 4.9 (b) in the First North Rulebook. The company s CA received a reprimand for not ensuring to a sufficient degree, that the company had observed its disclosure requirements as described above. One Danish First North company had a key person with a criminal record working for the company at management level but without being a part of the management. The company received a reprimand for not having adequately described this person s role in the company. The company also received a reprimand for not having told the market earlier that it had problems with the liquidity. The company s CA received a reprimand for not having properly ensured that the market got adequate information regarding the situation described above. One Swedish First North company was criticized for several breaches against the First North rules. The most severe breach concerned how the company had informed about a new issue of shares that it had made. The information stated that the issue had been oversubscribed and that the total payment had been delivered to the company when in fact the majority of the payment of the new shares had not been received by the company. The company s CA was also criticized since the exchange concluded that the CA had not performed its surveillance activities in line with the rules in regard to the information given by the company. The exchange should for instance have been informed at a much earlier stage regarding the breaches of the rules that the company had made. One Swedish First North company received criticism for having published its notice to an extra general meeting in a daily newspaper before the information was sent with a press release. The breach was considered as severe since the notice contains previously undisclosed information about a new issue of share in the company. One Swedish First North company received criticism for not having published any information about the record date for the dividend. The failure to publish this information resulted in that the shares of the company were traded at an incorrect price for several days. The shares in Ikast-Bording Elite Håndbold A/S that were traded on the First North observation segment were removed due to the fact that the company had published their annual financial statement for 2007/2008. Later in the month the shares were again transferred to the observation segment due to the fact that the company announced that it had decided to sell the handball organization to FC Midtjylland, provided an approval by the company s annual general meeting. The shares in Enlight International AB were placed on the First North observation segment on September 25th, 2008 after the company had published a public offer to the shareholders in Caperio AB. The shares of the company were during the month transferred back to their ordinary position after a company description regarding the new company s structure that fulfills the requirements in the First North Rulebook has now been published. The shares in of Dacke Group Nordic AB were placed on the First North observation segment after their subsidiary Anthill Customer Services International AB filed for company reconstruction after having failed to find a way to finance its business. Since this company represented a majority of the holdings of Dacke Group Nordic AB, the Exchange found that there where an adverse uncertainty regarding the company s financial situation.