MNB seizes Buda-Cash brokers, charging fraud

Deals

The Hungarian National Bank (MNB) said today it has taken over the management of Buda-Cash brokerage, and put restrictions on four banks in the DRB Group that worked closely with Buda-Cash, on charges that the brokerage falsified reports and caused HUF 100 bln in damages to tens of thousands of clients.

MNB deputy president László Windisch said at a press conference in Budapest today that the losses could impact approximately 15,000-20,000 clients of Buda-Cash Brókerhaz and about 100,000-120,000 clients of the banks in the DRB Group

Windisch said that Buda-Cash cannot account for its clients' funds, and that the abuses go back for several decades.

The restricted banks, which are closely related to Buda-Cash through their ownership, are Dél-Dunantuli Regionális Bank (DRB), Észak-magyarországi Regionális Bank (ERB), Dél-Dunantuli Takarék Bank (DDB) and Buda Regionális Bank (BRB), according to MTI. The central bank has reportedly placed a ceiling of HUF 1 million on withdrawals from those banks.

Windisch said that the sudden increase in the value of the Swiss franc in January precipitated losses worth about HUF 10 bln to the clients of the brokerage house and the banks. He said he was as yet unable to provide more accurate data, due to the investigation and the ongoing supervisory procedure.

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