MNB could turn to court on Quaestor client compensation issue

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The National Bank of Hungary (MNB) could turn to the court to defend Quaestor clientsʼ right to compensation if it fails to convince the board of the Investor Protection Fund (Beva) of its legal stand on the matter, central bank deputy governor László Windisch told Hungarian news agency MTI late yesterday.

"The investorsʼ damages were not the result of issuer risk that came with the corporate bonds, but of the investment service providerʼs abuses," Windisch said.

"One can speak about issuer risk – which is not covered by Beva – only if purchasers of the bonds had financed real economic activity with genuine bonds, and if the lending company or group of companies had gone bankrupt," he added.

The National Bank of Hungary suspended Quaestor’s operating license on March 6 due to irregularities, and the brokerage is currently under investigation on suspicion of fraud with CEO Csaba Tarsoly being held in pre-trial detention. Quaestor reportedly issued about HUF 150 bln in unsanctioned bonds prior to its insolvency.

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