Issue link: https://maltatoday.uberflip.com/i/556862
maltatoday, SUNDAY, 16 AUGUST 2015 10 News Malta-based company denies involvement in $100m fraud JURGEN BALZAN A Malta-based company, Exante, yesterday denied that it is a hedge fund and said it played no part in a $100 million fraud uncovered by the FBI and the US Securities and Ex- change Commission (SEC). Earlier this week, fraud charges were pressed against 32 defendants for taking part in a scheme to profit from stolen non-public information about corporate earnings announce- ments. The SEC described Exante as a Malta-based hedge fund, but the company yesterday denied that it is a hedge fund and claimed that the charges led to inaccurate headlines in the media. "Exante is a broker and provides direct market access (DMA) to most markets in the world. Contrary to the claims made in the complaint and subsequently in the media, Ex- ante is not, and has never been, a hedge fund, and Exante has never traded US stocks for its own account," the company said. According to the court complaint filed by the SEC, Exante is among the companies involved in the scheme which saw traders and hackers make as much as $100 million in illegal profits over five years by conspiring to use informa- tion stolen from thousands of corporate press statements before their public release. However, the company said that it "simply executes trades ordered by and for the ac- count of its customers" and not by or for Ex- ante itself. Exante insisted that it is unaware of any contact or affiliation by the company or its di- rectors, owners, or employees with any of the hackers or defendants named in the SEC com- plaint or with any of the defendants named in the related criminal proceeding. "Nor does Exante believe that it received any illegally obtained or other inside information regarding public companies. Exante is not a defendant in the criminal proceeding, and none of its directors, owners, or employees has been charged in either proceeding," the company said. While pointing out that it continues its operation in full, Exante said its employees would continue to do their best to ensure that clients receive outstanding service paired with security of their assets. While underlining its readiness to cooperate with investigating authorities, Exante said "il- licit trading will not be tolerated." The broker company added that it has en- gaged Howard Schiffman, a former SEC pros- ecutor, and Eric A. Bensky of Schulte Roth & Zabel LLP, a US-headquartered law firm that routinely represents major financial services organizations, to represent it in the SEC pro- ceeding. Exante accused of making $24.5 million in ill-gotten gains In its court complaint, the SEC accuses Exante of holding propri- etary trading accounts at Interac- tive Brokers and at Lek Securities, which were used in connection with the fraudulent scheme to make trades resulting in approxi- mately $24.5 million in ill-gotten gains. Exante is owned by Lartemisis Holdings Ltd, which shares the same address as Portomaso Tower in St Julian's. Three of the compa- ny's five Russian and Latvian direc- tors have Maltese addresses. Bruno Cakans and Gatis Eglitis live in St Julian's while Alexey Ki- rienko has a Sliema address. The two other directors; Anatoli Kn- yazev and Vladimir Masliakov live in Moscow, Russia. In its complaint, the US Securi- ties and Exchange Commission said that several of Exante's direc- tors are also owners of defendant Global Hedge Capital Fund Ltd., and the two entities share employees. "Exante and Global Hedge frequently made illicit trades in the same securities, on the same days and around the same time, and of- ten through the same IP addresses," the com- mission said. US prosecutors said the Ukraine-based hackers, who were given "shopping lists" of press releases by the traders based in Malta, New York, Cyprus, France and Russia, im- properly accessed press statements before the distributors planned to release them to the public. No need of EIA for ODZ warehouses JAMES DEBONO THE Malta Environment and Plan- ning Authority has exempted from the need of an Environmental Im- pact Assessment the proposed de- velopment of 22 industrial ware- houses and a parking area for 111 cars over three levels set on 7,800 square metres of land in a disused quarry. Din l-Art Helwa is objecting to the proposed industrial use of the disused quarry because the land in question is classified as an agricul- tural area and therefore should be rehabilitated for agricultural use. The site is owned by Maurizio Baldacchino, a shareholder in Bal- dacchino Holdings Limited, which owns the San Lawrenz resort in Gozo and other property develop- ments. The proposed development is lo- cated in a disused soft-stone quarry located in an Outside Development Zone (ODZ) area lying between the Mqabba and Kirkop residential zone. The proposed site is designated as an agricultural area by the South Malta Local Plan, lies within the aquifer protection zone and falls under the South Malta Local Plan policy. A screening report by MEPA ac- knowledges the project may have potential risks of oil leaks and acci- dental spillages from construction vehicles, albeit these are expected to be minor. Potential spillages dur- ing the construction phase can be mitigated through the proper ap- plication of appropriate mitigation measures identified in the Environ- mental Management Construction Site Regulations, 2007, combined with other standard permit safe- guards for industrial developments. One of MEPA's justifications for exempting the development from an EIA was that the site for the pro- posed development is located in an area which already includes quarry- ing and industrial activities. The application also foresees the building of football grounds in the same area but no reference was made to this in a project devel- opment statement submitted to MEPA, on the basis of which the project was exempted from an EIA. MEPA set to approve store in Bingemma fort JAMES DEBONO THE Planning Directorate is rec- ommending the approval of a new agricultural store in Bingemma fort, a historical building located in an Area of Ecological Impor- tance. Both MEPA's Environment Pro- tection Directorate and MEPA's advisory committee on natural heritage had strongly objected to the development because the site is designated as an Area of High Landscape Value. "The proposed construction is considered inappropriate due to the sensitive nature of the area and the relevant scheduling," the natural heritage panel said. The case officer had originally objected to the development be- cause applicant Kevin Bezzina already had enough storage place on his holding. The policy sets a 15 square me- tre limit to the size of stores for holdings which are between four and 10 tumoli in area. But the recommendation was changed to a positive one after Bezzina, who was represented by the architectural and design firm XYZ Limited, submitted evi- dence that the existing store had been removed. A condition being imposed on the developers is to surround the store with trees. A decision is expected next month. The Superintendence for Cul- tural Heritage has not objected to the development of a store in the historical fort. Part of the quarry site earmarked for an industrial warehouses area Bingemma fort, located in an Area of Ecological Importance