The celebrated Finance duo Sven Hagströmer and Mats Qviberg prepared the 20th anniversary of their joint bank HQ in spring 2010. But instead of fireworks and baluns became the burial coffee.
HQ had then for a long time had problems with the proprietary trading by the Bank engaged in options. Or as Mats Qviberg put it to the Swedish newspaper Svenska Dagbladet in connection with the losses became widely known in 2010: “It has been burning for three years.”
Now the bank was forced in a short time liquidate its portfolio. The losses were expected first land at about 500 million. That in itself was a big shock for both shareholders and customers. Then degenerated situation. The final bill landed on more than twice as much – 1.2 billion.
Qviberg rang the phone and said “How the hell can you torska, you have torskat a million dollars two days in a row “.
I never went into the discussion but you can lose money at all times.
Fredrik Crafoord, head options traders at HQ.
Financial Supervisory Drug Card then enter the HQ’s banking license, on Friday, 27th August 2010. This led to the historic decision to shut HQ Bank in just under an weeks since the bank was set into liquidation. Playoff Carnegie over the business.
Economic Crimes Bureau and the Prosecutor Martin meantime, after four years of work produced a gigantic investigative material to thousands of pages. It has also held numerous interviews with suspects. It all has now been boiled down to a few issues and formulated to prosecution.
In the indictment it is not the actual buying and selling of options in HQ’s trading portfolio as the prosecutor Martin Tidén shoot in on. Instead, it’s more about who knew what before the HQ went out in public with problems in May 2010. In particular, the information contained in the Annual Report for 2009 that are important to the charges.
There was a difference in HQ ways to evaluate their options and the actual market price. It is confirmed that SvD Business revealed last autumn, not only of the Bank’s accounting firm, KPMG, but also by HQ’s bank SEB, which is also shown in the preliminary investigation.
In the Annual Report, Board and CEO is responsible for, is not clear difference between the price HQ sat on the options portfolio and market price.
It is the latter that is serious and contrary to applicable accounting rules according to the prosecutor. Therefore, the crime of aggravated accounting fraud.
The misinformation has been spread through the annual report to the public and shareholders, as the prosecutor in turn headlining as racketeering. In this case, the suspected offense rough and can provide up to six years in prison if convicted.
The hunt for the culprits HQ crash began shortly after the Financial Supervisory pulled into banking license in August 2010. At first pointed the finger at the responsible option trader, Fredrik Crafoord. He reported to the police HQ’s board of directors in September 2010. He will not be prosecuted – Crafoord were terminated early from the preliminary investigation by the prosecutor.
An extensive documentation consisting of email, sms, risk reports, interrogation and board minutes from the preliminary investigation shows a more nuanced picture than previously disclosed.
Fredrik Crafoord informed, according to documents in the investigation, on a daily basis HQ’s risk department of the trading department’s commerce, information is also presented at Board meetings.
The Trading department did, according to internal documents, time and time again transactions that violated its own rules. But they have also kept their employer informed of infringements which may have saved Craaford from prosecution.
Despite daily reports on Craaford and trading department’s foul acted neither the president or the board of the subsidiary HQ Bank or its parent HQ of the data
The person who was Chief Risk Officer at HQ tells in his interview with the Economic Crimes Bureau that the email was sent for breach of the regulations. It was sent to the entire board of HQ plus Mats Qviberg who chaired the group.
According to the Crafoord, he himself also almost daily Chairman Mats Qviberg informed about how their own trade developed. The allegation that Mats Qviberg was kept up to date on HQ’s trading testify also another option traders on the bank of the interrogation of EBM.
– When the manager was gone, I sat and texted Qviberg about the results each day, he said to the interrogator.
– I myself was dialup of Mats Qviberg and yelled, because then we would have lost money two days in a row. Then he called me on the phone and said “How the hell can you torska, you have torskat a million dollars two days in a row”. I never went into the discussion but you can lose money at all times, says the options trader on in his questioning.
Even Michael König, CEO of HQ, quickly pointed out as part of HQ’s breakdown. König has in his role as president, among other things written on the financial statements that the prosecutor believes to be incorrect. How the trading went even got CEO Michael König frequent information according to documents and interviews in the investigation.
The problems of HQ’s trading portfolio became more serious in autumn 2009, as evidenced by the preliminary investigation . König has then, in email contacts with the risk department, asked how much it costs to decommission HQ’s positions.
The discussion should also have been raised at an informal meeting with Mats Qviberg, Chairman of the Group, and Stefan Dahlbo , president of the principal owner Sound and the chairman of the subsidiary bank.
This is clear word against word. Dahlbo do not really remember what was said, according to the interrogation of EBM. König and Craaford remember in their interrogation that they want to liquidate the portfolio immediately and take a charge of approximately SEK 150 million. In the interrogations stated that Qviberg would have opposed the losses would be, but instead demanded that the portfolio would be retained. Qviberg states in his interrogation that it was Craaford who wanted to wait a settlement.
Stefan Dahlbo and director Curt Lönnström are the other key people in the HQ group that is now being prosecuted. They have all been directly involved in the accounting, valuation and assessment of the trading portfolio accounted misleading in the financial statements according to the prosecutor.
Even HQ’s auditor Johan Dyrefors from KPMG suspected of having promoted crime by writing a ‘clean audit report. He is not complaining that the company charged unjustified profits from trading. He has not explained why it made and what impact it has become, consider the prosecutor.
Under the legislation, the Board and the CEO who is responsible for the accounting is correct, not the auditor. The auditor is responsible for the audit report.
Supervisory Board has previously has chosen to assign Johan Dyrefors a reminder of the lack of documentation in connection with the reporting of HQ.
At the same time SvD Business last autumn reveal that Dyrefors information to Supervisory Board is rejected by a senior colleague at KPMG. In interviews with EBM says his colleague to the 2009 Annual Report of HQ was never approved internally at KPMG, which Dyrefors always argued before the Supervisory Board.
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