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The Disciplinary Committee of NASDAQ OMX Stockholm AB (“the Exchange”) has found that Forestlight Entertainment AB (“Forestlight”), whose shares are traded on First North, has contravened the First North Nordic Rulebook (“the Rulebook”) in respect of disclosures and has ordered Forestlight to pay a fine of SEK 100,000 corresponding to two annual fees.
The case concerns Forestlight’s violation of Item 4.2 (a) of the Rulebook.
According to the investigation, Forestlight published a press release on May 13, 2013 under the title “Forestlight Entertainment has new owners and receives capital contribution.” This press release had a positive impact on the price of the company’s share.
Later that same day, the company withdrew the aforementioned press release by publishing another press release stating that it had been distributed by mistake and that it contained incorrect information. This resulted in the share price falling back to the level that it had traded at prior to the first press release. According to the investigation, however, it is apparent that the reason for the withdrawal was that not all of the agreements had yet been signed. On May 15, 2013, Forestlight published a press release under the title “Forestlight Entertainment has new owners and receives capital contribution.” The third press release had essentially the same text as the first release, apart from the name of the acquirer being specified. The press release had a positive impact on the price of the company’s share.
The Disciplinary Committee is of the opinion that before all of the agreements had been signed it was wrong for Forestlight to publish the first press release using the wording that it had, but accepts the company’s explanation that this was not due to shortcomings in its procedures but due to a misunderstanding.
However, the Disciplinary Committee believes that the press release regarding the withdrawal also provides grounds for criticism. The company stated that the previous press release had contained incorrect information, which was misleading since, according to the information provided by the company in this case, the matter did not involve incorrect information but that not all of the documentation had been signed. Trading in the share after the second press release indicates that investors had acted on the assumption that the information in the first press release had been incorrect.
Accordingly, the Disciplinary Committee finds that Forestlight has violated the Rulebook requirements that information published by the company has to be correct, relevant and clear and must not be misleading.
The violation is deemed neither negligible nor excusable. Accordingly, the company is to be subject to disciplinary sanction.
A more detailed description of the case and the Disciplinary Committee's decision is published on:
http://www.nasdaqomx.com/listing/europe/surveillance/stockholm/disciplinarycommittee/decisions/
