The Financial Supervisory Authority of Norway (Finanstilsynet) has issued a decision imposing a NOK 3.5 million violation penalty on Algorithmic Trading Group Netherlands Management B.V. for breaches of Regulation (EU) No 236/2012 on short selling and certain aspects of credit default swaps (SSR). The case concerns sales of EAM Solar AS shares in November 2024, where Finanstilsynet concluded the trades constituted uncovered short sales and that related net short positions were not reported as required. Algorithmic Trading Group Netherlands sold 5,014,500 EAM shares between 5 and 11 November 2024, matching its allocation in a private placement, while owning only 9,098 shares before initiating the sales. Finanstilsynet assessed that the investor became the “owner” of the new shares only when the capital increase was registered in the Register of Business Enterprises, immediately prior to EAM’s stock exchange announcement on 12 November 2024 at 17:19 CET, and noted that the new shares were not delivered until 13 November 2024. It concluded that none of the SSR Article 12 conditions for permitted short selling were met and that reliance on prospectus timelines or “expectation dates” did not provide sufficient security for timely T+2 delivery, particularly after EAM flagged potential registration delays. Finanstilsynet also found that Algorithmic Trading Group Netherlands failed to notify its net short positions under SSR Articles 5 and 9, starting with a 6.2% position as of 5 November 2024 (reportable by 15:30 on 6 November) and reaching 73.9% on 11 November 2024. The authority characterised the uncovered short selling as grossly negligent and estimated profit from the trading at NOK 2,844,159 using a VWAP-based methodology. The decision can be appealed to the Financial Supervisory Appeals Board (Finanstilsynsklagenemnda). Collection is handled by the Norwegian National Collection Agency, with an invoice issued after the appeal deadline expires or, if appealed, after the appeal is decided.
Norwegian Finanstilsynet 2025-04-01
Financial Supervisory Authority of Norway fines Algorithmic Trading Group Netherlands NOK 3.5 million for uncovered short selling and short position reporting breaches
Norway's Financial Supervisory Authority fined Algorithmic Trading Group Netherlands Management B.V. NOK 3.5 million for breaching Regulation (EU) No 236/2012 on short selling and credit default swaps. The firm made uncovered short sales of EAM Solar AS shares in November 2024 and failed to report net short positions. The authority deemed the actions grossly negligent, estimating profits from the trades at NOK 2,844,159.