Greek regulators have been waging a behind-the-scenes battle with a group of mostly London-based hedge funds who have targeted the country’s crisis-hit banking sector.
More than 20 hedge funds — including George Soros’ Quantum Fund, Toscafund, Everest Capital and Abbeville Partners — have received fines in the past three months from the Hellenic Republic Capital Market Commission as they sought to profit from Greek banks’ plummeting share prices.
The fines revolve around the funds’ so-called “naked” short-selling of bank shares in a way that the Greek regulator argues breaks pan-European rules.
The saga has unfolded amid heavy declines on the Athens bourse, with Greece’s financial sector sustaining especially dire losses this year against a backdrop of haemorrhaging deposits and the threat of a Grexit.
“The Greeks are shooting themselves in the foot,” said an executive at one of the hedge funds. “All these hedge funds have been helping to recapitalise the Greek banks at a time when no one else would touch them.”
[...]
In response, a group of hedge funds are lobbying the pan-European markets authority to pressure Greece into relenting on the fines, which total over €1m and have so far not been paid, according to several people close to the funds.
They have grouped together through the Alternative Investment Management Association, a London based industry lobby group, to present their case to the European Securities and Markets Authority (ESMA).
A spokesman for esma said that the issue had been brought to its attention by the hedge funds, but that no formal complaint had yet been lodged.
The dispute centres on whether the Greek regulator has been overly strict in its application of pan-European short-selling rules, with the hedge funds arguing that this results in a lack of consistency between Greece and other markets.
© Financial Times
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article