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FSC Takes Legal Action Against Glaucus for Spreading Rumors

icon2014/05/06
iconBrowse:2386

FSC Takes Legal Action Against Glaucus for Spreading Rumors  
 
 
Source: All Taipei newspapers   May 6, 2014
 
 
Taiwan’s top financial regulatory agency stated Monday that it planned to bring both civil and criminal actions against California-based short-seller Glaucus Research Group in Taiwan over its allegations that Asia Plastic Recycling (APR) Holding Co., a Taipei-listed company, had included inaccurate statements in its financial reports.   
 
Tseng Ming-chung (曾銘宗), chairman of the Financial Supervisory Commission (金管會FSC), stated yesterday that it decided to take legal actions against Glaucus because it had “maliciously spread rumors” and caused instability in the local stock markets. This is the first time that the FSC has taken legal actions against a foreign investment and research company.  
 
Over the past two weeks, Glaucus has issued a series of research reports, both in Chinese and English, indicating that APR, a foam-rubber recycler based in Fujian Province on Mainland China, had overstated its earnings. APR shares plummeted by as much as 31% in nearly a week from April 24-30 as a result, causing investors huge financial losses.     
 
Glaucus, which has been described as a “vulture” by local media outlets, is famous for shorting stocks. It has published negative reports about a number of Mainland Chinese companies listed in other countries or regions, especially in Hong Kong. This is the first time that it has targeted Taiwan’s stock markets.  
 
Glaucus has confirmed media reports that it had sold short ARP shares before releasing an unfavorable statement against APR on April 24.  
 
In a statement issued yesterday, Glaucus stated that it stood by its views and reiterated its position on APR. 
 
In a statement issued earlier, the Taiwan Stock Exchange stated that it found no anomalies after reviewing APR’s regulatory filings, international documents, contracts and payment records with local governments and suppliers on the Mainland.   
 
In light of this, FSC chairman Tseng Ming-chung stated that the FSC had requested its Securities & Futures Bureau, along with the Taiwan Stock Exchange, to file criminal charges against Glaucus on the grounds that it had allegedly violated Article 155 of the Securities and Exchange Act by maliciously disseminating false information. 
 

In addition, Tseng stated that the Securities and Futures Investors Protection Center would also assist investors in seeking compensation from Glaucus by filing civil suits against the investment and research company.   

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