The management of the company has been taken over by supervisory commissioners.

The NBH suspects that what it has discovered in a comprehensive audit of Buda-Cash Brókerház is a series of abuses going back several decades, NBH deputy president László Windisch said. It is suspected that the brokerage firm has falsified all of its reports over the past ten years and is unable to account for substantial client funds.

The damage can amount to about 100 billion forints (EUR 327m). The central bank has also put restrictions in place at the four banks belonging to the DRB bank group, which are closely related to Buda- Cash through their ownership. The NBH has placed a 1 million forint ceiling on deposit payment and appointed supervisory commissioners at the four banks.

Windisch said the sudden January increase of the Swiss franc exchange rate is not directly related to the shortcomings found at the brokerage firm although the exchange rate change caused losses worth about 10 billion forints to the company’s clients.

Windisch said about 15,000-20,000 clients could be affected at Buda-Cash Brókerház and about 100,000-120,000 clients at the DRB bank group, who can expect to receive compensation.

The Budapest Stock Exchange (BSE) said in the morning that it suspended Buda-Cash rights to trade on the bourse with effect February 24 until further notice but for a maximum of six months.

Buda-Cash has held trading rights in the spot and derivatives section. With HUF 149bn turnover, it was the eigth biggest trader on the spot market under double-counted figures of the BSE last year, and, with trades of HUF 268bn, it was the biggest trader of individual stock futures in 2014.

Source www.hungarymatters.hu

Follow that link to sign-up for MTI’s twice-daily newsletter.