Wavin - The AFM imposed an administrative fine of EUR 96,000 on Wavin N.V. ("Wavin") on 9 March 2011 for violation of the obligation to immediately disclose price-sensitive information.

On 3 May 2009, Wavin agreed with CVC Capital Partners ("CVC") on placing convertible shares and bonds with CVC at a substantial discount. On 4 and 5 May, the share price of Wavin increased by 19.86%. According to the AFM, on 5 May 2009 at about 10:44 hours Wavin knew that there were rumours in the market about the imminent transaction with CVC, but did not publish the price-sensitive information until 13:06 hours that day. In the AFM's view, Wavin was not in a position to delay publishing the information because such delay did not serve a legitimate interest of the company and increased the likelihood of misleading the public. Also, according to the AFM the rumours entailed that Wavin could not guarantee the confidentiality of the information. As such, the criteria to delay publishing price-sensitive information as set out in Section 5:25i paragraph 3 FMSA were not fulfilled according to the AFM.

Wavin lodged an appeal against publication of the administrative fine with the Rotterdam Court in interlocutory proceedings. The Court dismissed Wavin's appeal in its decision of 27 April 2011.

C1000 - The AFM fined the CEO of Schuitema (C1000) on 5 May 2011 for disclosing price-sensitive information to third parties during the takeover battle over food retailer Super de Boer.

Pursuant to Section 5:57 FMSA, any person who has access to price-sensitive information pursuant to a profession or position is prohibited from disclosing such information to third parties. On 18 September 2009, a newspaper article reported that Jumbo had launched a public bid for shares in Super de Boer. The CEO of Schuitema gave a presentation at a conference for franchisees of Schuitema five days later and referred to this article at the start of his presentation. He subsequently made several statements referring to Schuitema's possible role in this regard. As such, the CEO allegedly disclosed price-sensitive information to third parties and thus violated the prohibition. Based on the statements of the CEO, an attendee at the presentation decided to contact his broker to put in a purchase order for Super de Boer shares. Previously, the AFM had imposed a fine on this individual. Please see our Newsletter of April 2011 for details.

Pursuant to the new penalty regime (as per 1 August 2009), a violation of the prohibition on disclosing insider information to third parties can be fined with a base amount of EUR 2 million. In the present case, the AFM reduced the fine to EUR 200,000 taking into account the limited gravity and length of the violation, the degree of culpability and the director's financial capacity.

Fortis - The Rotterdam Court on 4 May 2001 handed down its decision in an appeal lodged by Fortis (Ageas) against administrative fines levied by the AFM totalling EUR 576,000 for breaches of the FMSA. The Court ruled that Fortis (i) violated the prohibition on market manipulation, and (ii) failed to immediately disclose price-sensitive information. The fines were upheld by the Court.

Pursuant to Section 5:58 paragraph 1 sub d FMSA it is prohibited to disseminate information which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or the price of financial instruments such as shares, where the person who disseminated the information knew, or ought to have known, that the information was false of misleading. The Court ruled that Fortis violated the abovementioned prohibition because its CEO made certain statements during a presentation with regard to the solvency situation of Fortis. In the Court's view, these statements were misleading because Fortis was planning to take emergency measures which deviated from the original solvency scheme. This information could have influenced a reasonable investor in its investment decisions. As such, Fortis violated the prohibition on market manipulation.

The second basis for the fine imposed concerns the failure to immediately disclose price-sensitive information. The Court states that price-sensitive information is information which would probably be used in a reasonable investor's decision to buy or sell shares. During a bidding process, as took place according to the Court with Deutsche Bank bidding for ABN Amro's subsidiary HBU in June 2008, the fulfilment of the abovementioned criterion should not depend on whether either the bidder or the target is certain that an agreement will be reached. The negotiations and a reasonable chance of consensus are sufficient to constitute price-sensitive information. According to the Court, this criterion was fulfilled in the present case. A listed company can delay making price-sensitive information publicly available if it, among other conditions, can guarantee the confidentiality of the information. An earlier newspaper article, in the opinion of the Court, made clear that Fortis, despite measures taken, could no longer guarantee the confidentiality of the information. As such, Fortis violated the obligation to immediately disclose price-sensitive information according to the Court. Fortis has appealed this decision.