Financial watchdog set to sue US investment research firm Glaucus
By Kathryn Chiu, The China Post
May 6, 2014, 12:02 am TWN
TAIPEI, Taiwan -- Taiwan's top financial regulator said on Monday that it will file a complaint with prosecutors against Glaucus Research, a California-based investment research firm, for spreading false information that aided in short-selling a Taiwan-listed company.
Financial Supervisory Commission (FSC) Chairman Tseng Ming-chung (曾銘宗) yesterday announced at a routine press event that his commission is prepared to take legal action against Glaucus Research Group for spreading “erroneous” information related to Asia Plastic Recycling Holding Limited (ARP,亞洲塑膠再生資源). The FSC is Taiwan's top financial regulatory agency.
ARP, incorporated in the Cayman Islands, recycles plastic bags and waste scraps to produce foam rubber products in China. The company launched a primary listing on Taiwan's main board in August 2011.
Tseng told the Central News Agency (CNA) that Glaucus Research Group spread false information through a research note in violation of the Securities and Exchange Act.
United Evening News on Monday reported that Securities and Futures Investors Protection Center (SFIPC) will take applications from investors seeking compensation starting from Thursday, May 8.
According to CNA, Glaucus first published a report about APR on April 24, accusing the company of overstating its financial data. The report alleged that the company's actual earnings were about 90 percent less than what it had filed to the Taiwan Stock Exchange (TWSE).
The TWSE last week sent a task force over to China, launching a three-day field audit at ARP's factory compound before concluding that annual reports filed by ARP from 2010 to 2013 were credible.
“We'd like to issue a serious warning: No one should release or spread false information on purpose to manipulate the stock market, or we will bring them to justice,” Tseng was quoted by CNA as saying.
Shares of ARP yesterday jumped nearly 7 percent, the maximum daily limit, to end at NT$72.8, giving the Taiwan-listed company a taste of sweet revenge.
After the Glaucus report surfaced in local media, F-ARP shares took a beating, plummeting from NT$80 to a low of NT$60.40 on April 30, losing a cumulative 30.09 percent in nearly a week.