The victims of Harinvest: "The BSE - a market full of thieves"

The investors who lost money and shares at "Harinvest" are extremely angry at the institutions of the stock market - The Financial Oversight Authority, the Bucharest Stock Exchange and the Central Depository, and don't want to hear about the stock market for as long as they live, which they describe as "full of thieves".

Over 25 of the clients of the brokerage firm of Râmnicu Vâlcea claim that they were left without the money and shares in their accounts, after the brokerage was barred from the stock market for three months because it did not have the money it needed for the settlement of some trades. After the initial calculations, based on paperwork, the total loss would be 1.1 million Euros, according to an investor, but the estimates of the victims go towards 2 million Euros.

Three of the customers of "Harinvest" have agreed to report their cases. Their situations are different, but they share one common thread: their "hatred" of the stock market and the institutions that are supposed to oversee it.

• Adrian Lungu: "I will use every available means to find out who was responsible and to recoup my losses"

Adrian Lungu is an investor who had 600.000 shares in the Proprietatea Fund (FP), received as damages, with a face value of 1 leu. He had never before came in contact with the stock market, and that loss will keep him away from the stock market as well.

He said: "I received 600,000 shares in the Proprietatea Fund as compensation, at a face value of 1 leu. I never moved them. When I saw that the Proprietatea Fund is offering to buy back shares at 1 leu, I transferred the shares from the first section of the Central Depository, to the second section of the Central Depository, at Harinvest.

I waited for the subscription period to end. I understood that it would take 7 days to get the money. I then phoned Harinvest because I wanted to buy cheaper shares from the market using the money I got out of the offering.

Broker Maria Voinea told me that she didn't have the time to talk to me right then, and I got the same response one week later. On December 2nd, I went to the headquarters of Harinvest, where I found several clients in an argument with Boghiţoi Florica Maria, a manager of the firm. I didn't understand what it was about and I didn't get involved in the scandal. I filed a request to get my money and my shares. Two days later I returned, and the angry investors were still there. I understood what was going on. The firm was broke.

The representatives of Harinvest told me that they have 600,000 shares of the Proprietatea Fund, but that they are unable to return to me the cash or the shares.

But after the public offering, I was supposed to still have 565,800 shares and the money for the shares sold.

Outraged, I took my matter to the Central Depository, to the BSE and the ASF - this octopus with arms all over the country - namely the brokerage firms - invented to kepe the Stock Exchange going.

Each of these institutions is raking in fees on the back of investors. The audit conducted by the ASF in 2012 revealed frauds at Harinvest. Why was it not closed down and it only received a warning instead?

Had they been shut down, I wouldn't have gone to them. Why were these brokers allowed to conduct sell-outs, when they don't have a portfolio, they don't have a house account. What were they selling out exactly? Why did these market institutions not ask themselves any questions?

I think that the blame for this lies with the legislative void that the BSE and the ASF are complicit in, not the small-time thief behind the keyboard.

There are several investors who suffered losses, which amount to a total of 1.1 million Euros, but we suspect that there are others.

I will use every available means to find out who was responsible and to recoup my losses, at any cost.

The market is being left in the hands of scum, the regulations aren't applied, just so the stock market can exist.

The fact that you can only get in the casino called the stock market through a brokerage firm leaves investors at the mercy of thieves".

• Tiberiu Georgescu: "The chairwoman of the company started to cry and say that the shares are gone, that everybody lost everything"

Tiberiu Georgescu says he was the first to find out that something was wrong at "Harinvest".

He told us: "I read in "BURSA" (ed. note: we were the first to report that the brokerage firm was forced to sell-out, in November). That's where everything started from. I wanted to check that situation out. Brokerage firm Maria Voinea explained to me that there was an incident in the market and that there were no problems. They lied to me for three or four days. I then found out that the ASF was doing an audit with them. I looked it up on the internet and I called the ASF on the phone, and spoke to Mrs. Cătălina Sava, the head of oversight. I wanted to check whether I still had the shares of Petrom I bought in May. I got a positive answer, so that settled me a little, but I still had a nagging feeling of fear.

I made a request to Harinvest to move my shares from the second section to the first section (at the Depository), but Mrs. Boghiţoi Florica wanted to fool me and to postpone the process - first by three days, and then by three days. I then found out that I no longer had the shares, and the manager of the company started crying - she told me that the shares were gone, that everybody had lost everything. That's how clients found out about it from one another, and everybody started checking their accounts.

I had shares in Petrom of 290,000 lei and 5,600 lei in cash. The people of Harinvest misled me.

The ASF caught them red-handed, but they did nothing. The ASF did not do its job of shutting the firm down. How is it possible to leave available to a brokerage all the holdings of their clients? What if some lunatic wakes up one day and decides to sell everything in the clients' portfolios?

I went to the BSE too. I was received by Anca Dumitru, the deputy CEO, even though I had requested to meet with Ludwik Sobolewski. I got no concrete answer from him. He told me that he couldn't believe it. But didn't the BSE wonder where Harinvest got that kind of money which allowed it to get that kind of turnovers on structured products (ed. note: Harinvest had a market share of 26% on structured products)?

The same thing at the Central Depository. They told me it wasn't their responsibility.

The stock market is Romania's thieves market. Nobody does their job. I think you'd have to be crazy to put money in stocks. Just wait and see this happen at other brokerage firms as well".

Another client says he is in a different situation, because he had been an investor for years and he systematically monitored the state of his portfolio. According to him, things went OK until September. He later decided to move to a different brokerage firm, as he had begun to worry after he had begun hearing rumors in the market. He says that he realized that "Harinvest" sold his shares in the Romgaz IPO without authorization.

The investor also says that at the headquarters of "Harinvest" he noticed the representatives of the ASF who were auditing the firm, but the brokers told him that those were checks made in connection with the Romgaz IPO: "I even made a request to move my portfolio away from Harinvest. This was the first time that the brokers did trades without my knowledge. At the headquarters of the company I met other victims and we swapped stories. I then asked to talk to someone who was in charge at the company. They then called chairman Veronel Lungu, but he did not want to talk to me. I made enquiries at the ASF, the BSE. I was received by Anca Dumitru and I was told that Ludwik Sobolewski was not in the country. It beggars belief. Why does the possibility exist for a broker to dispose of the cash and shares of their customers? They sold my liquid stocks - The Proprietatea Fund, the SIFs. I am left with Oltchim".

• What happens with the taxes owed by investors on the unauthorized sales made by brokers?

The "Harinvest" client says that he now owes the state taxes on the profits from the sale of the shares executed by the brokerage firm: "With things like this happening, who else is going to come to the stock market? I'm the one who lost money on this and I am still the one who actually ends up owing money! All the institutions get commissions and no one has any responsibility. This is a serious precedent. We do not have access to the Compensation Fund because this was a case of fraud. At the bank, they steal your goods from the safe deposit boxes. What do you do? You cross the border and you trade in Vienna".

SSIF "Harinvest" initiated "sell-out" from its portfolio, after it did not have the money to settle some structured products issued by Erste Group.

The representatives of the ASF told us on Tuesday that they notified the competent institutions after November's audit at "Harinvest", even though in 2012, the brokerage firm had already been fined for using the money of some its clients to settle the trades of others.