CySEC defends its latest settlements: "We are the regulator, please stop cheating"

Following latest slew of settlements (here and here) and a whole lot of criticism that ensued, CySEC just issued the

Following latest slew of settlements (here and here) and a whole lot of criticism that ensued, CySEC just issued the following statement which is a complete defense of its actions. Something that can be translated as ‘we have the right to act as we do, stop cheating’.

We’d expect CySEC to talk less and do more.

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The statement is basically its way of saying that we are the regulator so we have the right to take the decisions we took. It’s also a way of warning the regulated firms that they can’t do what they want and expect to get away with it through easy settlements (which is what actually is happening already).

ANNOUNCEMENT

The Cyprus Securities and Exchange Commission (‘the Commission’) would like to note the following:

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The Commission, under article 37(4) of the Cyprus Securities and Exchange Commission Law of 2009 (‘the Law’), has the power to reach a settlement (compromise) for any violation or possible violation, act or omission for which there is reasonable ground to believe that it took place in violation of the provisions of the Law or the Regulations or directives issued under this Law or the relevant legislation.

The Commission notes that even though a person, who agrees and consents to a compromise pursuant to section 37(4) of the Law and complies with all the terms that have been agreed, is not considered to have violated the relevant legislation he still has every obligation to fully comply with all weaknesses/alleged violations that CySEC established (through an inspection/investigation) and were the reasons why the settlement procedure was initiated.

CySEC wishes to stress that a settlement agreement DOES NOT in any way give a safe harbor to anyone from his obligations to comply with the relevant legislation. Following a settlement agreement, CySEC carries out new inspections to make sure that compliance has been achieved.

It is noted that the amounts due from settlement agreements are calculated as revenue (income) to the Treasury of the Republic and are not calculated as an income for CySEC.

Nicosia, February 14, 2013

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