Wherever MorganChase goes, market manipulation follows

Section:

Polish Market Regulator Seeks Probe of Late Share Deal

By Chris Borowski
Reuters
Friday, December 21, 2008

http://www.reuters.com/article/governmentFilingsNews/idUSLL6590262008112...

WARSAW -- Poland's financial and securities regulator KNF said on Friday it had filed a complaint with local prosecutors accusing a "person acting in the name of JP Morgan Securities" of possible market manipulation.

A spokesman in London for JP Morgan Securities, a unit of JPMorgan Chase, declined to comment.

The complaint is connected with transactions that took place on Nov. 12 when late transactions in what newspapers dubbed a "miracle" fixing session on the Warsaw bourse helped the main WIG20 index recover a good chunk of its losses.

The index had been on track that day towards its worst percentage drop this year, falling as much as 10 percent before ending the regular session 9.1 percent lower.

The regulator said a 130 million zloty ($42.8 million) order buying all members of the WIG20 pushed the index to close down just 4.9 percent. Warsaw stock exchange's continuous session is followed by a fixing auction at which closing prices for most shares are set.

"In the opinion of KNF, the actions taken by a person acting in the name of JP Morgan Securities may be considered a manipulation of a financial instrument," the regulator said in a statement.

"That is why the matter was forwarded to the district prosecutor's office in Warsaw."

The Polish regulator said the transaction was associated with an open position on the futures market.

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