Hungarian regulator imposes record fine on Soros investment firm
Budapest - Hungarian-born billionaire financier George Soros said he was "sincerely sorry" over a share deal for which his New York-based fund management company was fined over two million dollars for breaking Hungarian regulations.
"The case is especially upsetting to me because of my close personal attachment to Hungary," Soros said in a statement sent to the Hungarian news agency MTI late Thursday evening.
Hungary's financial regulatory body PSZAF imposed the same day a record 2.17-million-dollar fine on Soros Fund Management for breaking rules on influencing the market while trading on the Budapest Stock Exchange.
"I would like to stress that I no longer oversee the running of Soros Fund Management. I withdrew last year and now only direct deals on my own account," Soros said.
Soros Fund Management made a last-minute bulk sale of stock in the Hungarian bank OTP on October 9. The Hungarian regulator said the deal caused the price of OTP stock to plummet by over 14 per cent.
Shares in OTP bank continued to fall, and now trade at roughly half the price they did before the deal.
PSZAF said its investigation had revealed that Soros Fund Management had borrowed 390,000 OTP shares on the same day in order to carry out the short deal.
"Going short" is a term used in finance to describe a transaction in which an investor stands to make a profit through a fall in the value of certain stocks.
The fine is the largest that Hungary's financial regulator has ever imposed for a deal of this type. The figure was equivalent to four times the profit that Soros Fund Management LLC is believed to have made from the deal. (dpa)