The National Securities Market Commission (CNMV) has reported today that it is analyzing the information it requested from the pharmaceutical group Grifols regarding its accounting and relations with its main shareholders, and advances that it is also analyzing the activity of Gotham City Research, the fund vulture that accused her of manipulating the accounts and caused her stock market crash to analyze whether it represents market abuse.
The CNMV explains that it has received today the additional information that it had requested from the company and its shareholders but advances that "there is no evidence as of today, with the publicly available information, that the published and audited information of Grifols is not in accordance with the normative". Grifols management has maintained at all times that it committed no irregularities and has announced legal action against the hedge fund.
For this reason, the regulator explains that "beyond the review of Grifols' financial information, the CNMV is analyzing Gotham's conduct in terms of the content of its report, the way in which it was disseminated and the related market operations." says the CNMV. The fund repurchased its selling position in the pharmaceutical company on the same day as publishing its report, taking advantage of the stock market crash to obtain a profit of more than 20 million euros.
The CNMV points out that its analysis aims to “determine whether said conduct is in accordance with European regulations on market abuse, particularly those that address the dissemination of misleading information. Said analysis must necessarily be informed by the conclusion of the review of Grifols' financial information that the institution has received today.
The Spanish stock market regulator also assured that it rules out prohibiting short positions on the company (the possibility of selling shares without owning them, selling them on credit). Thus, he points out, "he has been closely monitoring the positions on Grifols since the 9th" and in his opinion "they do not present high values and have not determined the fundamental evolution of the price of the security" so the legal conditions do not exist to justify the prohibition of that operation.
Other funds, such as Millennium International Management of billionaire Israel Englander, the eighth richest financier in the world according to Forbes, announced a few days ago a bearish position on the stock of 0.7% of its capital, which partially closed on Friday after the decision of Yes
The CNMV also responds to the criticism it has received for not suspending the share price after the publication of the report, which caused a collapse that left many retail investors trapped. In his opinion, there is “no specific privileged information pending publication that would imply a situation of asymmetric information between different investors”, so it has not been necessary to suspend trading as a precautionary measure.
The CNMV explains that until now it has focused on clarifying “the information about the company available to shareholders and investors.” With the information received, the regulator assures that its analysis of whether the information provided by Grifols is correct “may take a few weeks without being able to determine a specific date for its conclusion,” nor anticipate it.
Although the regulator has not so far noted any irregularities in the information provided by Grifols, and has the possibility of asking for clarifications, as it has done now, the CNMV recalls in its statement that “the post-hoc supervision function does not replace nor have the same scope.” that the duty of the directors to reflect a true image in the financial information and the duty of the auditors to issue a professional opinion founded on that circumstance.”
