Investment prohibited

On April 4, 2006, the Polish Securities and Exchange Commission (KPWiG) suddenly came out with a surprising statement that shook the brokerage scene in Poland. The regulator ordered an immediate stop to all investment activities of one of the largest brokerage companies in Poland, Warszawska Grupa Inwestycyjna (WGI) Dom Maklerski. The company has also been fined zł.500,000.

KPWiG has put forward very serious charges, accusing WGI of misleading its clients regarding their stock accounts, passing on documents to KPWiG which contained information divergent from information delivered to clients and lack of proper internal supervision within the company. All in all, 10 charges were leveled against WGI.

WGI officially denies them all. The company sent out a detailed statement in which it comments on each charge separately, and denies any wrongdoing. Moreover, WGI sources wonder if it is a coincidence that KPWiG suddenly pressed charges just after WGI announced its expansion plans. They underline that KPWiG has carried out various audits over the last 12 months and never pressed any charges.

KPWiG representatives were unavailable for comment, and thus it is unknown exactly what evidence will be presented to back up the accusations. WGI's spokesperson, Artur Niewrzędowski, said that the company will appeal to the Commission to verify its decision. Regardless of the appeal, WGI will expand abroad with new arms, such as WGI Europe.

"We will expand to other European countries and will offer financial services regarding non-regulatory markets [which don't require a bourse license]," Artur Niewrzędowski says.

"Regarding our current customers, they will be offered an opportunity to sign new agreements with new companies, such as WGI Europe."