FRAUD IN "BROKER" CLUJ"S DEVA OFFICE Clients of the brokerage firm lost more than their invested amounts

• All this time, investors were being told that their portfolios were "booming"

Customers of the financial services and investment company "Broker" Cluj who lost their money in the fraud from the company"s Deva branch actually show up as owing money to the company to the tune of tens of thousands of lei, said one of the affected investors.

In April 2007, the above mentioned investors deposited 100000 lei in a discretionary account opened with the Deva office of SSIF Broker, thus giving the broker complete control over how to invest the money.

"I have deposited a total of 350000 lei in that account, for which I have the receipts", said the customer.

When asking for a portfolio statement at the central headquarters of in Cluj, the customer found that in the company"s records he only figured with 150.000 lei, and no one could tell him where the rest of the money was gone.

"According to my portfolio history, out of the 150000 lei, 100000 had been withdrawn by money order, even though I had not signed anything, and 50000 had been lost in trading. As if that wasn"t enough, my portfolio with Cluj says I owe them 15000 lei", said the investor.

According to the investor, several other clients of the brokerage firm who opened accounts with the Deva branch of "Broker" are in a similar situation.

"Today (editor"s note: Friday) I went together with seven other investors at the headquarters of the brokerage firm in Cluj and we asked to see our portfolios. Their records show that all eight of us actually owe the company money, and some of the injured parties don"t even show up in the company"s records as having deposited any money with them", our quoted source said.

"All this time, the brokerage firm sent me notices telling me that my portfolio was ", the investor said. He also said:

"I have scheduled a meeting of all the investors defrauded by Broker"s Deva office on Sunday (editor"s note: yesterday), at 18:00, in front of the offices. We are looking to hire a lawyer and we will sue the company in order to get our money back".

• Cristian Duţescu: The employer could very well be responsible for the employee"s actions

Cristian Duţescu of the law firm "Duţescu & Partners" said that he has already been contacted by some of "Broker" Cluj"s customers in order to represent them in court, but he has not concluded any agreement so far. "From a legal point of view, there remains to be seen if there will be criminal lawsuits for what happened at the company"s Deva branch or whether we"re just talking liability in tort here", Mr. Duţescu further stated.

He also added: "In this case, the employer might be considered liable for the actions of its employee while on the job. Cluj could be considered liable for all the damage incurred by its clients".

• CNVM has suspended the operations as well as trading of "Broker" Cluj shares for two weeks

After two days where the National Securities Commission (CNVM) and "Broker" Cluj officials took jabs at each other over which one uncovered the fraud in Deva first, the Commission decided last Thursday to suspend the operation of "Broker" as well as the trading of its shares on the BSE for two weeks. The market regulator has argued, among other things, the need for continuing investigations on the activity of SSIF "Broker", as well as on the irregularities found in the company"s branch in Deva.

"The reasons that the Commission brought forward are insignificant when compared with the sanction of the National Securities Commission (CNVM), which is overkill and will not help in shedding light on the situation in Deva. No bank ever got shut down when an accident happened at one of its counters", said Mr. Petru Prunea, president and general manager of "Broker" Cluj.

" I hope the members of the commission do not expect that their punishment will help us get to the bottom of the Deva situation any faster and that all of our 160 employees will just work on solving that case", Mr. Prunea further said.

Last Wednesday, trading of BRK shares was temporarily suspended, as soon as rumors began circulating in the market about a possible fraud at the company"s office in Deva. Later, after the company issued a statement on the irregularities found in Deva, trading of BRK shares was allowed to resume, but the price fell sharply by 12% in just an hour and a half.

"What"s happening now has a devastating impact on the image of Cluj", Mr. Prunea said. "In Deva there were two kinds of operations taking place: on one hand, we have transactions that we were involved in, but on the other hand, we are talking about a second operating circuit, where investors handed over money to the former head of the agency and they went into her pocket. These funds never entered the company", Mr. Prunea said. "Because of this, we don"t even know which customers were defrauded because they don"t figure in our records", Mr. Prunea added.