Rogue traders run for cover
The Polish Securities and Exchange Commission (KPWiG) has urged WSE officials to introduce a 'dynamic price range', which would prevent share values jumping suddenly beyond a two-percent margin.
The recommendation comes in the wake of two dramatic errors that were felt on the trading floor.
Recently, the share price of newspaper publisher Agora plunged by 10 percent in two minutes in response to a faulty sell offer issued by a trader from BZ WBK brokerage house. The brokerage house's loss (estimated at zł.2,500) was minimal, with just over 700 shares changing hands for below zł.59 per share, but that did not prevent Agora stocks plummeting to zł.54.2 during a few seconds.
In the end, the trader's error did not have significant repercussions as the price rallied towards previous levels before the close of business. However, a similar mistake, which boosted oil giant Orlen's share price by eight percent in seconds, originated a month ago from the same brokerage house. At that time, BZ WBK losses were reportedly larger, estimated at zł.250,000.
KPWiG has suspended the license of an unidentified trader, who is said to be responsible for both errors, while it investigates the case.
"A final decision [on the trader's license] will be made after completing the full procedure, during which we will clarify all doubts, and the trader will have a chance to provide arguments in his defense," reveals Łukasz Dajnowicz, KPWiG's press officer.
The two-percent limit that the regulator has urged WSE officials to introduce would exclude human mistakes, but does not prevent investors' mischief, which seems to weigh heavy on the bourse.
Authorities are also investigating the alleged collusion of some senior managers from several investment funds to take control over the price of Stomil Sanok in 2003. Dajnowicz admits that the case is very serious: "At this stage [of explanatory proceeding] I cannot exclude filing further notifications to the prosecutor."
Even if the prosecutor succeeds in putting those responsible behind bars, a tense atmosphere in the financial market remains. Managers themselves could find a cure, however, by getting rid of the black sheep and enforcing corporate governance rules.
The recommendation comes in the wake of two dramatic errors that were felt on the trading floor.
Recently, the share price of newspaper publisher Agora plunged by 10 percent in two minutes in response to a faulty sell offer issued by a trader from BZ WBK brokerage house. The brokerage house's loss (estimated at zł.2,500) was minimal, with just over 700 shares changing hands for below zł.59 per share, but that did not prevent Agora stocks plummeting to zł.54.2 during a few seconds.
In the end, the trader's error did not have significant repercussions as the price rallied towards previous levels before the close of business. However, a similar mistake, which boosted oil giant Orlen's share price by eight percent in seconds, originated a month ago from the same brokerage house. At that time, BZ WBK losses were reportedly larger, estimated at zł.250,000.
KPWiG has suspended the license of an unidentified trader, who is said to be responsible for both errors, while it investigates the case.
"A final decision [on the trader's license] will be made after completing the full procedure, during which we will clarify all doubts, and the trader will have a chance to provide arguments in his defense," reveals Łukasz Dajnowicz, KPWiG's press officer.
The two-percent limit that the regulator has urged WSE officials to introduce would exclude human mistakes, but does not prevent investors' mischief, which seems to weigh heavy on the bourse.
Authorities are also investigating the alleged collusion of some senior managers from several investment funds to take control over the price of Stomil Sanok in 2003. Dajnowicz admits that the case is very serious: "At this stage [of explanatory proceeding] I cannot exclude filing further notifications to the prosecutor."
Even if the prosecutor succeeds in putting those responsible behind bars, a tense atmosphere in the financial market remains. Managers themselves could find a cure, however, by getting rid of the black sheep and enforcing corporate governance rules.
