Riga City Court has received a criminal case from the prosecution office. For the first time in Latvia’s history, two persons are accused of stock market manipulations at Nasdaq Riga stock exchange.
The case stipulates that the accused, together with his wife, knowing that a Latvian company would be de-listed from Nasdaq Riga, decided to perform simulated transactions to increase the turnover of the company’s shares on the stock market.
The accused man, as a member of the board of directors of a limited liability company (LLC) registered in Latvia, which owned shares in the joint stock company in question, posted more than 30 000 shares on Nasdaq Riga for sale at a price more than three times the book value of the company’s shares.
Immediately after that, the accused man’s wife, who was the sole member in the LLC, purchased the shares as a private person. Thus, both defendants had planned to increase the turnover of the joint stock company’s shares on the Nasdaq Riga stock exchange above 1% in the last 12 months from the capitalization of the joint stock company, so that at the time of their repurchase they would receive an additional 130 000 euros.
The accused failed to secure material benefits from these actions because the Bank of Latvia noticed it and decided not to take it into account when approving the share re-purchase option for the joint stock company.
Such a crime is punishable with a prison sentence of up to four years, community service or a fine.
The accused do not admit their guilt in this crime.
In March 2016, the Criminal Law was supplemented with a new article on the illegal use of inside information and manipulation of financial markets. This is the second criminal case in the history of Latvia initiated after the said Article of the Criminal Law, and the first criminal case in the history of Latvia in which a person has been prosecuted after this Article of the Criminal Law.
The prosecutor’s office stresses that no person shall be considered guilty until his or her guilt in committing a criminal offence has been established in accordance with the procedure laid down in the Criminal Procedure Law.