CNMV to investigate trades before Popular rescue

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THE NATIONAL Securities Market Commission (CNMV) – the Spanish government agency responsible for the financial regulation of the securities markets in Spain – is investigating if there is proof of insider trading in Banco Popular in the lead up to its bailout by Santander.

‘We will investigate if, in the days before the intervention in Banco Popular, there was privileged use of information and manipulations in the stock market,’ president of the CNMV Sebastian Albella said in an interview published by financial newspaper ‘Expansion’ on Wednesday.

Banco Popular was acquired by Spain’s biggest bank – Santander in an overnight auction in early June for €1 after the European Central Bank warned it was on the verge of collapse.

Santander has acquired 100 per cent of Banco Popular’s shares and debt and also plans its own capital increase worth €7 billion to cover the absorption.

Banco Popular shares dropped almost 60 per cent in its last month of trading in the lead up to Santander’s acquisition on June 7.

Albella said the investigation would concentrate on moves on the stock market in the run up to the rescue.

Deposit flight from Banco Popular in the weeks before its rescue has also led to calls for an investigation, though Albella noted that it wasn’t within the CNMV’s responsibility to investigate the withdrawals.

European Central Bank supervisor Daniele Nouy was questioned in the European Parliament’s economic affairs committee on Monday over a withdrawal of deposits from Banco Popular by local and regional authorities.

Economy Minister Luis de Guindos said on Tuesday that some institutional depositors withdrew their money from the bank after a credit rating downgrade.

 

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