According to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, there’s been a “major system failure” at DnB NOR when handling inside information. Norway‘s partly state owned bank conducted a massive trade in Norwegian treasuries just before the government presented it’s bailout package in October 2008.
“We hope the this will be noticed.”
Several central individuals at DnB Nor misused the inside information about the Norwegian governments bailout package to the national banks in October 2008. “This is very serious,” District Attorney Thomas Skjelbred at the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) says.
According to the Norwegian Økokrim, the country’s largest financial institution has a very reprehensible practice for handling inside information.
“We have uncovered extensive system failure in DnB NOR,” first District Attorney Thomas Skjelbred at Økokrim says to the web site DN.no.
The bank has violated the Securities Act’s provisions for inside information on several paragraphs, both in terms of handling inside information, the prohibition against insider trading, care obligation and the law that state that one must have clear procedures for handling inside information.
“There are quite a number of requirements that has been broken. This is very serious,” Skjelbred says.
The investigation started after it became clear that DnB NOR on the 9th and 10th of October 2008 sold bonds for a total of net NOK 2.3 billion to other banks, and reaped substantial gains.
The sales was executed after the Bank had received information about the rescue package from the government, including meetings between the management at DnB NOR and the Central Bank of Norway on October 9th.
When the packages were announced two days later, the bond market dropped.
“An investigation like this will always affect individuals, but in this case it shows a comprehensive assessment system failure that is reprehensible, “ the first District Attorney says.
Skjelbred thinks the penance size is a severe reaction, and hope this may have a preventive effect.
“We hope this will be noticed, ” he says to DN.no.
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