Terra Securities bankrupt
The Financial Supervisory Authority of Norway (Kredittilsynet) has revoked the license of brokerage Terra Securities, the company involved in selling disputed commercial papers to Norwegian townships.| Related stories: |
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Terra Securities filed for bankruptcy after the decision and its shares were immediately suspended for trading on the Oslo stock exchange.
Terra Securities is embroiled in a dispute where northern townships Rana, Hemnes, Hattfjelldal and Narvik claim they were systematically tricked and misled to pour public funds into high-risk bonds.
In a press release the company said it was filing for bankruptcy since the loss of their license meant they could no longer arrange a solution for the four communities.
Kredittilsynet director Bjørn Skogstad Aamo said that the authority had to issue a strong reaction after a thorough examination revealed several and serious violations of requirements for good and correct information.
"Consideration for future customers in the securities market is a major reason for the Kredittilsynet now notifying the revocation of licenses for Terra Securities," Skogstad Aamo said.
Terra Securities is owned by Terra Markets, which in turn is partially owned by the Terra Group.
It remains unclear how much money the four northern townships have lost in their dealings with Terra. Four new municipalities, Kvinesdal, Bremanger, Vik and Haugesund, have signaled they would also take action against Terra for being sold complex high-risk products without full information.
Ola Sundt Ravnestad, CEO of the Terra Group, resigned on Wednesday as a result of the scandal.
e24
Aftenposten English Web Desk
Jonathan Tisdall
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