• Market Wizards BV received a penalty fee for violations of the short selling regulation.

Case Overview

• SWE FI decided Market Wizards BV must pay a special fee of SEK 4,000,000 for having carried out short selling of shares even though short selling conditions were not met.
• IRRAS AB (IRRAS) carried out a rights issue during the period August - September 2022, which was decided by the Board of directors on 4 July 2022, and arranged as rights issue.
• Those who subscribed for shares in the rights issue first received paid-up subscribed shares (BTA), which were all then converted into the normal shares on 6 September 2022.
• During the issue period concerned, Market Wizards BV obtained 2,801,754 BTA partly through various acquisitions, and partly through the exercise of the subscription rights.
• On 31 August 2022, Market Wizards sold 2,991,761 shares and then purchased 380,007 shares in IRRAS, thereby net selling 2,611,754 shares in IRRAS, as part of transaction.
• On 29 June 2023, SWE FI raised the issue of whether the company, through its sales, had carried out short selling, even though conditions for short selling were not met.
• The company believed it has not carried out short sales without coverage in IRRAS.
• In event SWE FI assessed that there were short sales without coverage, the company believes that the violation was excusable since the company did not intend to carry out short sales without coverage, and there was therefore reason to waive the special fee.
• On 4 October 2024, SWE FI sent a profit calculation to Market Wizards regarding the company's estimated profit due to the sales on 31 August 2022, and it accepted the SWE FI profit calculation, effectively confirming the breach of short selling regulation.
• Penalty fee will be invoiced when decision is legally binding by expiry of appeal limit.