The Financial Supervisory Authority of the Central Bank of Iceland (FME) has decided to impose an administrative fine on Arion Bank of ISK 87.7 million due to the Bank's breach of obligation to disclose insider information in a timely manner. The decision has been published on FME's website. Arion Bank intends to refer FME's decision to the courts and demand an invalidation.
The background of the matter is that early in September 2019 Arion Bank announced to the FME that insider information were in place within the Bank and the Bank would use the permission in the law to postpone public disclosure. The information pertained to expected financial impact of organizational changes within the Bank. One of the conditions for postponement is that the Bank can secure the confidentiality of the information.
On 22 September 2019, an article was publish on a small online media stating that organizational changes would soon take place within Arion Bank. At that point, Arion Bank was obliged to assess whether there had been a leak of confidential information from the Bank. The Bank concluded that this could not be the case as the article substantially deviated from the information in place within the Bank and no reference was made to the potential financial impact of the organizational changes. The Bank believed the article to be no more than speculations based on information that had already been made public by frequent news reports in the previous weeks regarding upcoming organizational changes within Arion bank and streamlining of the Bank's operations. As a result of the above the conditions to postpone disclosure of insider information continued to be fulfilled in the Bank's opinion.
FME disagrees with the conclusion of the Bank and has decided to impose an administrative fine on the Bank due to the Bank's breach of obligation to disclose insider information in a timely manner. The Bank denied a settlement offering from the FME in the case as the Bank firmly believes it was fully compliant with all legal and regulatory requirement applicable. In the decision, FME states that previous fines on Arion Bank were taken into account when the amount of the fine was determined even though the Bank has never been fined for breach of disclosure requirements.
As stated above, Arion Bank intends to refer FME's decision to the courts and demand an invalidation. Authorization for issuers of shares listed on stock exchange to postpone disclosure of insider information is a subjective legal matter which has never been addressed by Icelandic courts.
For further information please contact Theodór Fridbertsson, Head of Arion Bank's Investor Relations, at ir@arionbanki.is or tel.+354 856 6760.
