Saipem: Consob sanctions two Dutch funds for naked short selling
The Authority chaired by Paolo Savona fined Optiver and Flow Traders for short selling: the two entities had taken advantage of the extreme volatility associated with the transaction
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Consob has fined two Dutch funds that carried out 'naked' short selling on Saipem securities in the summer of 2022, i.e. without borrowing the securities to be sold, taking advantage of the extreme volatility associated with the company's capital increase. In detail, the Commission sanctioned Optiver for EUR 2.5 million and Flow Traders for EUR 2.2 million, confiscating assets equal to the illegal profits made, i.e. approximately EUR 2.74 million and EUR 2.26 million respectively. Naked short selling is prohibited under national and European law.
Consob's recall violation
.Both funds were market makers, therefore they should have ensured liquidity to the market, and they disregarded the call for attention made by Consob itself in June 2022 precisely in view of Saipem's capital increase. Between 12 and 14 July, when the transaction was underway, Optiver moved 44.33% of Saipem's capital without informing either Consob or the market and realising a capital gain of EUR 2.7 million.
realised capital gains
.Similar situation for Flow Traders. In July 2022, it moved 7.2% of Saipem's capital. And, also in this case, it did not make the necessary disclosures by realising a capital gain, of EUR 2.2 million. Hence the penalty of EUR 2.2 million plus a further EUR 2.2 million in confiscation of the illicit profit.
