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Central Bank: Buda-Cash Brokerage Could Cause HUF 100 Billion Damage

2015.02.24.

The National Bank of Hungary (MNB) has suspended the licence of brokerage Buda-Cash with immediate effect on suspicion of wrongdoing. MNB supervisors have taken control of Buda-Cash and filed a report to police authorities, Reuters reported. Moreover, client access to securities and other assets has been suspended pending further investigation. Buda-Cash, member of the Budapest Stock Exchange, has been one of the leading retail brokerages in Hungary with branches in 11 towns and nearly 200 employees.

Deputy president of MNB, László Windisch said at a press conference in Budapest today that the losses could impact approximately 15,000-20,000 clients of Buda-Cash and about 100,000-120,000 clients of the banks that worked closely with Buda-Cash (DRB Group). Besides Buda-Cash brokerage restrictions have been put on four banks of the DRB Group as well.  According to the charges the brokerage falsified reports and caused 100 billion forints in damages to tens of thousands of clients.

Meanwhile, MNB has banned other companies too. Different Choice FBC, registered in the Republic of Seychelles, and Forex Club, registered in the Republic of Panama, have been both banned temporarily from conducting investment service activity and acting as dependent agents in Hungary. The suspension took place with immediate effect pending the completion of a supervisory procedure. The two companies have conducted investment service activity and supplementary activity in Hungary without an operating licence and acted as dependent agents without having fulfilled their notification obligations.

via reuters.com, bbj.hu and hungarymatters.hu photo: brokerblog.hu