Commodity trader Blackstone is said to have manipulated share prices

Swiss commodities trader Blackstone Resources is said to have illegally boosted its share price. According to the Financial Market Authority (Finma), the company has also published sponsored buy recommendations.

Blackstone Resources headquarters in Baar.

Urs Flüeler / Keystone

The Financial Market Authority (Finma) has the Swiss raw materials company Blackstone Resources Market manipulations and breaches of disclosure requirements identified. The company and one of its executive bodies have repeatedly improperly influenced the share price since the 2018 IPO, Finma said on Tuesday.

Price-boosting share purchases

According to Finma, the parties in the proceedings refused to provide the information requested. However, based on the information available, it was found that the company or persons associated with it had repeatedly made manipulative price-driving share purchases in certain trading periods. In addition, order book entries were made that had no recognizable economic background.

In addition, Blackstone has repeatedly made public statements in a potentially price-boosting manner. For example, in May 2019, the company announced a large off-exchange private placement on its website, with shares trading for three times the market price at the time. Blackstone claimed to have achieved net proceeds from this transaction, although, according to Finma, the transaction was demonstrably structured in such a way that the company did not receive any new funds.

Sponsored buy recommendations

In addition, the communication did not mention that the private investor in question was an organ of Blackstone. Furthermore, according to Finma, Blackstone has published sponsored buy recommendations with price targets well above the stock market prices actually paid; they were based on partly incorrect information.

In addition, Finma found that one of the company’s bodies only corrected the notification of its own holdings after the financial supervisory authority had followed up. And finally, Blackstone Resources miscalculated and reported its own shareholdings, thereby violating disclosure requirements.

Finma wants to ensure fairness and transparency

In principle, Blackstone is not a company regulated by Finma. The FINMA decision was made within the framework of general market surveillance, the statement said. Finma was in contact with the Federal Audit Oversight Authority (RAB) and the SIX Exchange Regulation (self-regulation of the stock exchange). With its communication, FINMA wants to ensure that market participants are informed about manipulative activities.

«Market manipulation affects fair and transparent trade. They undermine the confidence of market participants in the markets,” said Patric Eymann, head of Enforcement at Finma, in the statement. The authority will therefore continue to investigate suspected cases of abuse of the market consistently and persistently.

As Finma further reports, its decree is not legally binding. It can be challenged in court.

Baar-based Blackstone Resources specializes in battery technology and battery metals. The company also trades in gold, silver and metals such as lithium, nickel and cobalt, which are used, among other things, to manufacture lithium-ion batteries for electromobility.

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