Securities Commission begins clamp down on misleading practices

The Securities and Stock Exchange Commission (KPWiG) has passed a resolution to introduce guidelines for broker houses to use a homogenous standard for m arket recommendations issued by them. The Commission believes this will enha nce the quality of recommendations and make them more reliable. Such a move was expected in the future, but was accelerated following the recent case of the ITI television and media company, where discrepancies in evaluating the share value by different brokers amounted to several hundred percent. Seriou s questions began to be asked in the Commission. "Our inspections of several companies have proved that some our concerns were right. We know that it is difficult to apply a single system to judge all recommendations, but we want to provide at least a common framework for them," said KPWiG chairman Jacek Socha. Although the system will not have the force of law, KPWiG hopes the p roposals will be universally accepted by the market. The Commission also is addressing some accounting methods that could be interpreted as creative acc ounting and mislead investors. Several companies, suspected of using such me thods have been approached by the Commission with a request to issue a state ment whether they employed such accounting techniques. "This is not an order , but a guideline. The penalty for providing false information is five years imprisonment, or a zl. 5 million fine. We believe that such declarations wil l protect the market from misleading information," said Socha. (Parkiet, p. 4) M.T.