The National Securities Commission accelerates investigation into the purchase of bonds

The president of the National Securities Commission (CNV), Sebastian Negriassured that the investigation for alleged fraudulent maneuvers in the purchase of bonds “has the objective of guaranteeing market transparency”, and reaffirmed that improper conduct will be sanctioned.

In an interview with Télam, Negri highlighted that “It will be the most important investigation of our management”and that is why “the whole team is committed to reaching results and conclusions as soon as possible”.

In the next few days, the CNV will continue with the hearings of the brokerage firms and then the confrontation with individuals and companies will continue. Negri remarked that “We are at the disposal of the Judiciary to provide the explanations that are considered”.

The CNV is the official body in charge of the promotion, supervision and control of the securities markets throughout the Argentine Republic, and is currently investigating possible maneuvers in the purchase of foreign debt bonds, an instance that was entrusted by the Minister of Economy, Sergio Massa.

Below are the main sections of the dialogue:

-What happened the day before Massa’s announcement of the repurchase of bonds for US$ 1,000 million?
–There was certainly more volume in the trading of the bonds that are used to settle against dollars known as MEP or cash with settlement (CCL), but we were already coming from record levels in previous days and weeks, so it is not that we were surprised.

-And what could be the reason for the increasing volumes?
–There the reading is double because, on the one hand, one may think that this growing volume had to do with attempts to manipulate the market to force an increase in the price of financial dollars. And, on the other hand, we are also going to investigate if there was privileged information, that is, if any actor may have found out before the Ministry’s announcement and made use of that data to obtain some profit.

-Why would agents be interested in forcing a rise in financial dollars?
–The CNV does not evaluate motives regarding why someone would want the prices of the stock dollars to go up or down. Our mandate is to achieve transparent capital markets. Faced with this, if we analyze and are able to prove that there was coordination, financing for significant volumes to people without habitual behavior and that gives us an indication that there was market manipulation, then we can act. But we cannot judge the motives regarding why they did it, in any case there will be other instances that will finish discussing whether that motivates another type of action, be it judicial or of another order. I have the same to say about inside information: we will do everything we can to piece together, to see if anyone got any information and used it for profit.

-And what was new in the investigation?
–It started this week, so it’s still too early to draw any conclusions about what would have happened. This will arise from the information that we are gathering and from its subsequent analysis, from the exchanges with other State agencies and also, naturally, from what we submit to Justice in the coming weeks upon request.

-On Thursday they began to hold audiences with some stock exchange companies, is there the possibility that they also include individuals in this process?
–Effectively, on Thursday we began to take audiences with the Stock Market companies that operated the most volume in those days. We quote two per day and the process will continue next week. Once that’s over, we’ll probably start setting audiences for individuals and for businesses. That is to say, the famous client, the clients of the brokerage firms.

-Did they add any relevant data in the hearings?
–I still can’t anticipate it. The information and investigations in CNV, as in Justice, are secret. We are at the disposal of the Judiciary to provide the explanations that are considered.

-Did the judiciary lift the stock market secrecy?
–We have not yet been notified of this, we are attentive and available, and if the stock market secrecy is lifted by the Justice, they may have access to the entire file. From the first day we are working so that the information we generate serves so that justice can take the point of investigation to a higher instance, also understanding that crimes such as privileged information are difficult to prove.

– Does the episode under suspicion affect the credibility of the capital market?
–The objective has to be to provide peace of mind and transparency to the market, and for this it is important to put any suspicion or irregularity in the courts or in a summary in the CNV.

-What deadlines were set to conclude the investigation?
–The period that we set ourselves is the shortest possible, since it will be the most important investigation that we are going to carry out -I think- during our administration. The entire team is committed to reaching results and conclusions as soon as possible.

– Are they going to go to Congress to explain the case?
–We are going to have to create an instance of interaction with the Legislative Power, as the Minister of Economy requested in his request. We are interested in political and parliamentary authorities and the public understanding that the capital market is transparent and that they have peace of mind that if there was market manipulation, if there was privileged information, these are conducts that will be investigated and eventually sanctioned.