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Commerzbank (CRZBY) Fined by CySEC for Market Manipulation
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Commerzbank AG (CRZBY - Free Report) will pay €650,000 to the Cyprus Securities and Exchange Commission (“CySEC”). The penalty is related to a probe into Commerzbank and Cyprus Popular Bank’s (“CPB”) role in market manipulation between Jan 1, 2008, and Mar 15, 2013.
Per the regulator, CPB invested in two structured products that were issued by the Commerzbank on Feb 5, 2008. At the time, Marfin Egnatia Bank S.A was the index sponsor for the invested products, i.e., their value was determined by Marfin Egnatia. Further, the composition of the underlying portfolio of the structured product was dynamic and determined by the index sponsor.
However, post the merger of Marfin Egnatia and CPB, the CPB became the index sponsor as of Mar 31. 2011. The regulator found that the underlying basket was mainly comprised of shares of the CPB and other firms of the Marfin Investment Group (to which the CPB belonged). Also, the CPB shares were incorporated into the underlying basket of the structured product in 2011.
Per the evidence gathered by CySEC, Commerzbank executed the voting rights attached to the shares purchased during the Shareholders’ General Meetings in all cases, following a request and based on the instructions of the Index Sponsor.
CySEC thereby concluded that both “CPB and Commerzbank AG used the structured product as a vehicle in order for Commerzbank AG to act as a surrogate of CPB in a disguised manner and acting in concert to manipulate the market in relation to CPB’s shares on 4, 5, 6, 14, 15, 18, 19, 20, 21, 26 and 27 April 2011 and 6 and 30 May 2011.”
Last week, Commerzbank was in news for planning to cut in excess of 7,000 jobs and shut down about 400 branches, as a response to the shareholder criticism over its inadequate pace of cost cutting.
However, the bank is facing trouble of late as both its chairman and CEO have offered their resignation to the supervisory board. The German government and Cerberus Capital Management, a longtime Commerzbank investor, want to replace the CEO with someone with a proven capability of implementing stringent cost cuts.
Shares of Commerzbank have lost 27.3% over the past six months compared with the industry's decline of 31.9%.
Currently, the company carries a Zacks Rank #4 (Sell).
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Commerzbank (CRZBY) Fined by CySEC for Market Manipulation
Commerzbank AG (CRZBY - Free Report) will pay €650,000 to the Cyprus Securities and Exchange Commission (“CySEC”). The penalty is related to a probe into Commerzbank and Cyprus Popular Bank’s (“CPB”) role in market manipulation between Jan 1, 2008, and Mar 15, 2013.
Per the regulator, CPB invested in two structured products that were issued by the Commerzbank on Feb 5, 2008. At the time, Marfin Egnatia Bank S.A was the index sponsor for the invested products, i.e., their value was determined by Marfin Egnatia. Further, the composition of the underlying portfolio of the structured product was dynamic and determined by the index sponsor.
However, post the merger of Marfin Egnatia and CPB, the CPB became the index sponsor as of Mar 31. 2011. The regulator found that the underlying basket was mainly comprised of shares of the CPB and other firms of the Marfin Investment Group (to which the CPB belonged). Also, the CPB shares were incorporated into the underlying basket of the structured product in 2011.
Per the evidence gathered by CySEC, Commerzbank executed the voting rights attached to the shares purchased during the Shareholders’ General Meetings in all cases, following a request and based on the instructions of the Index Sponsor.
CySEC thereby concluded that both “CPB and Commerzbank AG used the structured product as a vehicle in order for Commerzbank AG to act as a surrogate of CPB in a disguised manner and acting in concert to manipulate the market in relation to CPB’s shares on 4, 5, 6, 14, 15, 18, 19, 20, 21, 26 and 27 April 2011 and 6 and 30 May 2011.”
Last week, Commerzbank was in news for planning to cut in excess of 7,000 jobs and shut down about 400 branches, as a response to the shareholder criticism over its inadequate pace of cost cutting.
However, the bank is facing trouble of late as both its chairman and CEO have offered their resignation to the supervisory board. The German government and Cerberus Capital Management, a longtime Commerzbank investor, want to replace the CEO with someone with a proven capability of implementing stringent cost cuts.
Shares of Commerzbank have lost 27.3% over the past six months compared with the industry's decline of 31.9%.
Currently, the company carries a Zacks Rank #4 (Sell).
Stocks to Consider
Credit Suisse Group’s 2020 earnings estimates have been revised 11% upward over the past 30 days. This Zacks Rank #1 (Strong Buy) company’s shares have lost 25.2% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Encore Capital Group Inc.’s (ECPG - Free Report) earnings estimates for the current year have been revised 34.4% upward over the past 60 days. Over the past six months, this Zacks #2 Ranked (Buy) company’s shares have lost 3.3%.
Earnings estimates for GAIN Capital Holdings, Inc. moved significantly north over the past 60 days for the ongoing year. The company’s shares have rallied 43.9% over the past six months. It carries a Zacks Rank of 2 at present
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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