A Cypriot court has annulled more than €6.4 million in fines
issued by the Cyprus Securities and Exchange Commission (CySEC) against Greek
business siblings Ioannis and Amalia Vardinogiannis, CyprusMail reported.
The ruling ended a years-long insider trading case that
collapsed due to legal flaws in CySEC’s handling of the investigation. The
Administrative Court accepted the appeals brought by both siblings and ruled
that CySEC’s board had been improperly constituted during critical phases of
the probe.
As a result, the court found that decisions taken during
that time were legally void. CySEC had fined Ioannis Vardinogiannis €6,388,300
and Amalia Vardinogiannis €50,000, alleging the pair benefited from a 2007
share deal using insider information.
On March 29, 2007, Amalia acquired over 19 million shares at
€0.09 each and sold them three months later for €0.42 per share, generating
profits exceeding €6.3 million.
The regulator claimed Amalia acted on behalf of
her brother and that the trade was made based on non-public information
regarding the company’s operations in the shipping sector and changes in
shareholding.
CySEC considered this a violation of insider trading laws. However,
the court focused on procedural issues raised by the appellants. Their legal
team argued that CySEC’s decisions were made by a body whose composition had
already been declared invalid in unrelated rulings.
The court agreed, stating that any decisions made under the
flawed composition could not stand. “In light of the above, the claim regarding
the flawed constitution is accepted,” the court noted, adding that it was
unnecessary to review other objections.
The court formally annulled the penalties and ordered the
state to pay €1,700 plus VAT in legal costs to each of the appellants. The
ruling underscores the legal risks financial regulators face when internal
processes fall short, even in cases involving serious market abuse allegations.
Expect ongoing updates as this story evolves.
A Cypriot court has annulled more than €6.4 million in fines
issued by the Cyprus Securities and Exchange Commission (CySEC) against Greek
business siblings Ioannis and Amalia Vardinogiannis, CyprusMail reported.
The ruling ended a years-long insider trading case that
collapsed due to legal flaws in CySEC’s handling of the investigation. The
Administrative Court accepted the appeals brought by both siblings and ruled
that CySEC’s board had been improperly constituted during critical phases of
the probe.
As a result, the court found that decisions taken during
that time were legally void. CySEC had fined Ioannis Vardinogiannis €6,388,300
and Amalia Vardinogiannis €50,000, alleging the pair benefited from a 2007
share deal using insider information.
On March 29, 2007, Amalia acquired over 19 million shares at
€0.09 each and sold them three months later for €0.42 per share, generating
profits exceeding €6.3 million.
The regulator claimed Amalia acted on behalf of
her brother and that the trade was made based on non-public information
regarding the company’s operations in the shipping sector and changes in
shareholding.
CySEC considered this a violation of insider trading laws. However,
the court focused on procedural issues raised by the appellants. Their legal
team argued that CySEC’s decisions were made by a body whose composition had
already been declared invalid in unrelated rulings.
The court agreed, stating that any decisions made under the
flawed composition could not stand. “In light of the above, the claim regarding
the flawed constitution is accepted,” the court noted, adding that it was
unnecessary to review other objections.
The court formally annulled the penalties and ordered the
state to pay €1,700 plus VAT in legal costs to each of the appellants. The
ruling underscores the legal risks financial regulators face when internal
processes fall short, even in cases involving serious market abuse allegations.
Expect ongoing updates as this story evolves.
