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The Disciplinary Committee of Nasdaq Stockholm (“the Exchange”) has ruled that Deflamo AB (“Deflamo”) has contravened the generally accepted practices on the stock market, thereby breaching Nasdaq Stockholm First North’s regulations (“the Rule Book”), and has therefore issued a warning to Deflamo.
In September 2015, Deflamo published a press release stating that it had lowered the subscription price and extended the subscription period for warrants outstanding in series TO 2 B. In light of statements issued by the Swedish Securities Council, the Exchange questioned whether the change of terms was consistent with generally accepted practices on the stock market.
Despite being informed that the change of terms was not consistent with generally accepted practices on the stock market, Deflamo decided to carry out the subscription in accordance with the new terms since they had already been registered with the Swedish Companies Registration Office. In light of this fact, Deflamo determined that changing back to the earlier terms would constitute a new breach.
The Disciplinary Committee has concluded that Deflamo acted in breach of the generally accepted practices on the stock market and that the company has thus undermined public confidence in the Exchange, Nasdaq First North and the securities market in general.
Taking into consideration the fundamental principle that securities market trading is to take place under predictable terms, the Disciplinary Committee has concluded that Deflamo should have understood that the earlier statements by the Securities Council concerning changes to the terms for issuing convertibles also applied to warrants and that the company’s actions would typically result in a fine.
However, given that the Securities Council extended its earlier statements to include warrants during the subscription period for Deflamo’s warrants and that there have previously been a number of cases in which companies listed on First North and other markets have changed the terms of their warrants, the Disciplinary Committee has deemed the circumstances of the case to be somewhat extenuating, which is why only a warning was issued.
A detailed description of the matter and the Disciplinary Committee’s decision are available at:
http://www.nasdaqomx.com/listing/europe/surveillance/stockholm/disciplinarycommittee/decisions/
Participating in the Committee’s decision were former Supreme Court Justice Marianne Lundius, Supreme Court Justice Anne-Christine Lindeblad, Company Director Anders Oscarsson, Company Director Carl-Johan Högbom and former Authorized Public Accountant Bo Magnusson.
