The Securities and Futures Authority (SFA) has closed its two year investigation into the manipulati...
The Securities and Futures Authority (SFA) has closed its two year investigation into the manipulation of the Stockholm Stock Exchange with the expulsion of James Archer, Adrian Ezra and David Crisanti from the Registrar of Representatives.
Known as the Flaming Ferraris, all three individuals are now banned from working in the City and are faced with the payment of contribution to SFA's costs.
Archer, Ezra and Crisanti were employed by Credit Suisse First Boston (CSFB). Crisanti was previously global head of Index Arbitrage, Ezra was vice president in Equity Index Arbitrage responsible for European Index Arbitrage and Archer was a junior trader on the index arbitrage desk.
All three of them were close friends and attempted to manipulate the OMX index on the Swedish Stock Exchange on the morning of 29 December 1998 and also attempted to disguise the circumstances from the stock market's surveillance and CSFB's compliance department.
Archer carried out a self-trade, according to the SFA. He arranged with brokers to tamper with the price of one of the stocks, Stora Kopparbergs Bergslags AB, on the exchange by selling massively in order to cause a price drop in the share.
Following a merger between of Stora and Enso, which would see the two shares converting to Stora Enso on the 29 December 1998, Archer had tendered the Swedish book's Stora shares for conversion on 17 Dec 1998. This left the Swedish Book temporarily imbalanced and was short of Stora shares and would therefore benefit from a fall in Stora shares.
If the SSE did not notice the deals, they would because of their volume and price significantly affected the OMX index which is calculated on a VWAP basis. The SSE took it up to investigate the matter further.
Archer was backed by Ezra and Crisanti who both knew of his actions, the SFA said.
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