A TECHNICAL ADVISOR warned the Portuguese financial regulation watchdog CMVM that BCP was manipulating the market as far back as 2002.
The technician at the Comissão de Mercado de Valores Mobiliários detected signs of market manipulation by Banco Comercial Português between 2000 and 2001 and advised his supervisor to take action.
Instead the supervisor chose to simply pass on the information to bosses who simply questioned the bank about the allegations and demanded explanations rather than opening an enquiry.
The latest bombshell is contained in a report handed into the Parliamentary Financial Supervisory Commission by Deputy Honóraria Novo.
Now opposition members on the committee are claiming that the allegations and information were not treated as sufficiently serious and accuse both the Bank of Portugal (BdP) and the CMVM of “failing to follow up the allegations and act on the information”.
Last week PCP party deputies presented alternative reports that concluded that the CMVM showed little willingness “to face the facts.”
The deputies, who also criticise the Bank of Portugal, allege that the CMVM technician produced a report in February 2002, when the CMVM was led by the current Minister of Finance, Fernando Teixeira dos Santos, warning the regulator about a number of dubious BCP share operations.
On the basis of this and stock market movements, the CMVM technician report admitted signs that the market was being illegally manipulated and suggested proposals for a thorough investigation.
In March 2002 BCP replied to the CMVM that the origin of the transactions causing concern was to do with an account on the Cayman Islands involving scores of the banks private investor clients.
Later, however, it emerged that the “clients” were none other than companies owned by the bank and directors at BCP itself – constituting an illegal act.
Honóraria Nova alleges that the CMVM “had all the clues it needed to move forward with an in-depth investigation but turned a blind eye” and accepted the BCP explanation at face value
The CMVM said that the report mentioned by the deputy had been passed on to the relevant authorities that had demanded explanations, and that BCP had replied that they had involved operations carried out on behalf of “various clients.”
Now the CMVM is admitting that the clarifications given by BCP were “not truthful” which has led to a process against BCP for “making false declarations.”
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