ADVERTISEMENT

MNB still probing staff, management at failed brokerages

Telco

The oversight on fraud cases uncovered at three independent Hungarian brokerages earlier this year were concluded, however, the National Bank of Hungary (MNB), in its capacity as financial market watchdog, is still scrutinizing the staff and management at all three, central bank director Richárd Végh said at a conference organized by the Society of Hungarian Economists yesterday.

Végh said that damages to investors caused by the fraud at the Quaestor brokerage is in excess of HUF 150 bln, while damages at Buda-Cash reached HUF 100 bln and those at Hungária Értékpapir were "in the billions of forints". Between 1996 and the broker scandal of early 2015, a total of 14 investment companies failed, resulting in combined damages of HUF 4.3 bln, he added.

Among the recommendations the MNB is making to prevent a repeat of similar scandals, is to introduce sub-accounts for investment company clients at clearing house KELER, where all client accounts are currently combined, Végh said. He noted that Quaestor was able to sell unsanctioned bonds by falsifying the records of client accounts.

Another new regulatory control will be the introduction of regular reporting on investment company clientsʼ data, Végh said.

The MNB has found no fraud at other investment companies, however, reviews are still underway, he said.

ADVERTISEMENT

Rate-setters augur slower decline in CPI in 2022 Analysis

Rate-setters augur slower decline in CPI in 2022

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

The strongest move - Morgan Stanley Hungary head and Chess F... Podcasts

The strongest move - Morgan Stanley Hungary head and Chess F...

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.