“Finanstilsynet Imposes Infringement Fees on Six Investors for Breaching Short Selling Rules in Flyr Private Placement Issue”

Finanstilsynet has imposed infringement fees on six investors for breaching the rules on uncovered short selling.

The case is updated.

The violations occurred in connection with the fact that the investors had been allocated shares in the private placement in Flyr in November 2022, according to the inspection.

The fees are between NOK 50,000 and NOK five million.

The following companies have received fees:

• Handelsbanken Fonder is assigned a fee of 5 million kroner. They were assigned 1.25 billion shares in the issue. They later placed sell orders on all the shares. The trade was stopped by the Oslo stock exchange, but not before 695 million ashes had been sold. The Norwegian Financial Supervisory Authority estimates a gain of DKK 1.48 million.
• Titan Venture has received an infringement fee on 1 million kroner. Titan was awarded 560 million sharesand enter a sell order on 25 million shares at 14.09 on 16 November, according to the Norwegian Financial Supervisory Authority. At 16.25 they had sold 17 million shares, and had a gain on NOK 291,640, according to the Authority’s calculations.
• Anavio Capital is subject to a fee DKK 1.5 million. They were awarded 750 million shares in the issue, and sold 22.7 million, for a profit of 649.000 NOK.
• Hamilton Stuart has received a fee on NOK 750,000. They were awarded 100 million shares and sold 52.9 million for a gain of 153.390 kroner, according to the supervisory authority.
• Orca Capital is assigned a fee ofto NOK 500,000. They were assigned 500 million shares, and sold 2.7 millionand got a profit on NOK 15,173 according to the inspection.
• In addition, an unidentified actor has been charged a fee 50.000 NOK. The relevant person/company was assigned 50 million shares, and sold in total 25 million with a gain of NOK 15,000.

Flyr went bankrupt in January this year. Before this, they raised money through an issue, a type of capital raising, and on the same day that several billion new shares came into trading, share trading in the former airline shot through the roof.

In other words, far more shares were traded in Flyr than the number registered in the company, in the time period before the investors had the opportunity to sell shares they had been allocated in Flyr’s crisis issue.

Among the actors who went to the media and announced that this could be uncovered short selling (see fact box), was manager Jan Petter Sissener.

– It is quite obvious that someone is breaking the rules, Sissener told E24 in November.

– Deserves a slap on the finger

In a comment to E24, Sissener says that it is not up to him to have any thoughts about the fee itself, but that he is impressed that Finanstilsynet is addressing it, and that it is entirely appropriate to issue fines.

Is this enough to deter investors going forward?

– I hope so, NOK 5 million stings. Maybe not for international funds, but for all other mortals, it stings very well. I am absolutely certain that the inspectorate has done a good job and that this is justified, he says.

The profiled investor explains that it is common for other rules to apply abroad, but that you should know the rules locally.

– They deserve a slap on the finger, says Sissener.