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Tarsoly put in pre-trial detention

Issues

A Budapest court yesterday placed Quaestor CEO Csaba Tarsoly and two other suspects, involved in the recent Quaestor brokerage scandal, in pre-trial detention for 30 days, Hungarian state-owned television M1 reported late yesterday.

The Quaestor boutique brokerage encountered issues not long after Buda-Cash brokerage’s license was withdrawn by the National Bank of Hungary (MNB) leaving Quaestor clients unable to access their funds. Quaestor initially said they needed to report bankruptcy due to panicked clients withdrawing their monies after the fallout of the Buda-Cash scandal, however, when MNB officials investigated Quaestor, they discovered that it had issued bonds for its own company, and that issue had allegedly exceeded the amount of bonds it was legally allowed to sell by HUF 150 bln.

Tarsoly’s legal representative reportedly filed an appeal against the CEO’s arrest late last week. The court said on its website that the detention of the suspects was necessary due to any risk that they might influence witnesses or hide evidence in connection with “large-scale fraud and other crimes”. Tarsoly’s attorney Gábor Papp said he disagreed with the court’s reasoning. Papp added that his client has been ready to cooperate with the authorities for the past three weeks.

MNB suspended Quaestor’s operating license on March 6 due to irregularities, yet authorities only detained Tarsoly on March 26. In the past two weeks, Tarsoly sold ownership of Quaestor to Béla Orgován, who has reportedly been jailed numerous times and unemployed all his life. Later, when Tarsoly was accused of evading responsibility, he resumed ownership from Orgován.

Recent news reports suggested that Tarsoly could have connections with Hungary’s foreign minister Péter Szijjártó and Prime Minister Viktor Orbán. Tarsoly reportedly said he had asked for assistance from both Hungarian officials to help resolve issues at his brokerage, however, both the foreign ministry and the PM have rejected such claims.

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