TEN YEARS LATER: Securities thefts are happening again

• Dan Paul, the chairman of the Association of Brokers: "I have informed the National Securities Commission (CNVM) of several such cases, and they simply told me I was just making assumptions that don"t check out. It seems they do, after all"

Ana Săbiescu

The Brigade for Fighting Organized Crime of Piteşti, more specifically the Service for Combating Funding of terrorism and Money Laundering, took legal action ex officio on August 7, 2007, against 25 people that initiated and created an organized group of criminals, which committed stock market fraud between 2006 and 2009, said Nicolae Blaga, the head prosecutor of DIICOT (Department to Counter International Organized Crime and Terrorism) Piteşti.

The actions of the groups include stock market manipulation, as the group made fictitious stock market transactions, using forged documents, fraud, and money laundering.

The members of the group recruited six employees of the Central Repository, who helped them obtain confidential data of over 300 victims who owned shares issued by the five financial investment companies (SIF).The group used forged documents made out to the names of the victims, traded the victims" shares on the Bucharest Stock Exchange, through brokerage firms, causing 2 million lei in losses, by withdrawing the money on behalf of the victims from several commercial banks.

Ştefan Băiaşu, the spokesperson of the Central Repository, explained that currently none of the employees of the institution has any legal issues. Mr. Băiaşu added: "In 2007 we have uncovered certain cases where people did not meet the legal requirements. We made an internal investigation, and we subsequently notified the market regulators and the police, and the persons we investigated were dismissed".

The spokesperson of the Central Depository also said that the institution he represents periodically investigates its employees in order to prevent any legal issues.

The Central Repository handles the registry of shareholders of the various issuers of stock, as well as the clearing and payment of stock trades. The institution is regulated and supervised by the National Securities Commission (CNVM), together with the Romanian National Bank, in the case of clearing and payment operations. The majority shareholder of the Central Repository is the Bucharest Stock Exchange itself.

Dan Paul, the Chairman of the Association of Brokers, said for "Bursa": "I have informed the National Securities Commission (CNVM) of several such cases, and they simply told me I was just making assumptions that don"t check out. It seems they do, after all".

"We notified one the stock market watchdog of one such case that happened two years ago in Bucharest", Dan Paul said, who added that the Romanian stock market needs clearer verification procedures, that would be applied rigorously.

The president of the Association of Brokers claim that it would be a very bad thing if this event affected investors" confidence in the domestic capital market, but he hopes that this would not happen.

Victor Stănilă, the spokesperson of the Romanian National Securities Commission, said: "We"re talking about a case that happened in 2007, that was investigated based on a notification made by the Romanian National Securities Commission (CNVM). At the time the CNVM took the required measures and applied the appropriate sanctions".

The spokesperson of the stock market regulator added: "The employees of the Central Depository were subjected to an administrative investigation and were laid off".

The 12 defendants are currently participating in hearings at the headquarters of DIICOT Piteşti, and the investigation is ongoing. DIICOT Piteşti has also impounded assets of the defendants worth 1.4 million lei.