Portugal’s stock market regulator remained blissfully unaware of key developments in the BES collapse which it says "apparently" influenced stock prices before shares in BES were suspended last Friday.
The regulator has responded so certain of the statements by the Governor of the Bank of Portugal in a Parliamentary hearing.
The regulator (Comissão do Mercado de Valores Mobiliários - CMVM) claimed today that it had suspended BES shares at 3.00pm last Friday because only then had it become aware of "imminent developments" that would influence the bank's share price.
The CMVM team led by Carlos Tavares said that "earlier we were not informed about any other decisions relating to BES and these apparently influenced prices".
The explanation from CMVM comes a day after the governor of the Bank of Portugal, Carlos Costa, stated in Parliament that the possibility of saving BES was only put on the table after the market closed on Friday last week.
Costa said that by lunch time last Friday, the Board of Governors of the European Central Bank in a teleconference had decided to suspend BES access to monetary policy operations with effect from Monday 4 August.
At this point, Carlos Costa said that the Bank of Portugal had until Monday to find a solution for BES.
On Friday of last week, the regulator suspended trading in BES shares as they had dropped to 12 cents. This trading session had a suspiciously high volume of transactions in the hours before suspension. This has led the regulator to open an investigation into whether inside information was being used - clearly it was.
In the 42 minutes prior to the suspension of the securities, more than 83 million BES shares changed hands, a normal day would see 37.7 million shares traded, as those in the know ditched their holdings. Apparently the regulator did not spot anything amiss until the well-connected conveniently had sold their holdings.
The regulator seems to inhabit a parallel universe as today it provided clarification, saying it "always seeks to ensure that investors and potential investors have all the information" to take their decisions "based on clear, complete and true facts as soon as they come to light." Just a spectacular failure then.
Those that see a long-term career for Tavares as head of CMVM are in increasing danger of losing their wagers.
