Hungary's Central Bank Fines PannErgy for Market Manipulation
The Hungarian Central Bank imposes a 10 million forint fine on PannErgy for misleading stock trading practices.
The Magyar Nemzeti Bank (MNB), Hungary’s central bank, has levied a market supervision fine of 10 million forints on PannErgy Nyrt.
due to trading activities that were deemed as market manipulation.
The company's buyback transactions reportedly gave misleading signals to investors about the actual market situation of the stock.
According to the official statement from the MNB, during its supervisory procedure, it was found that PannErgy's share buybacks from May 2022 to December 2023 on the Budapest Stock Exchange (BÉT) constituted a significant portion of the trading volume.
On 112 trading days, the company's transactions accounted for over 50% of the daily trading volume of its shares, on 40 days they surpassed 75%, and on 12 days exceeded 90%.
These activities raised concerns about potential breaches of the EU’s Market Abuse Regulation (MAR), which prohibits market manipulation.
The MNB's investigation determined that PannErgy's trading behavior during this period significantly deviated from typical market trading practices and could have influenced investors' decision-making processes.
Therefore, the transactions appeared to distort the perception of the stock's demand and supply, affecting market transparency and integrity.
The MNB highlighted the responsibility of issuers to conduct share buybacks within regulatory frameworks that prohibit manipulation.
By providing objectively misleading signals regarding financial instruments, PannErgy was found to be in violation of market manipulation prohibitions.
Following the findings, the MNB not only imposed the fine but also banned any further breaches of market manipulation regulations by PannErgy.
Additionally, the bank lodged a report on suspected illicit market influence.
The fine amount was influenced by the severity of conduct, given that PannErgy, as a public issuer listed on the stock exchange, repeated the actions over several months.
due to trading activities that were deemed as market manipulation.
The company's buyback transactions reportedly gave misleading signals to investors about the actual market situation of the stock.
According to the official statement from the MNB, during its supervisory procedure, it was found that PannErgy's share buybacks from May 2022 to December 2023 on the Budapest Stock Exchange (BÉT) constituted a significant portion of the trading volume.
On 112 trading days, the company's transactions accounted for over 50% of the daily trading volume of its shares, on 40 days they surpassed 75%, and on 12 days exceeded 90%.
These activities raised concerns about potential breaches of the EU’s Market Abuse Regulation (MAR), which prohibits market manipulation.
The MNB's investigation determined that PannErgy's trading behavior during this period significantly deviated from typical market trading practices and could have influenced investors' decision-making processes.
Therefore, the transactions appeared to distort the perception of the stock's demand and supply, affecting market transparency and integrity.
The MNB highlighted the responsibility of issuers to conduct share buybacks within regulatory frameworks that prohibit manipulation.
By providing objectively misleading signals regarding financial instruments, PannErgy was found to be in violation of market manipulation prohibitions.
Following the findings, the MNB not only imposed the fine but also banned any further breaches of market manipulation regulations by PannErgy.
Additionally, the bank lodged a report on suspected illicit market influence.
The fine amount was influenced by the severity of conduct, given that PannErgy, as a public issuer listed on the stock exchange, repeated the actions over several months.
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