Estonian bank suspends staff at centre of SEC probe

November 2, 2005
By David Mardiste
Reuters

...The SEC on Tuesday charged Estonian company Lohmus Haavel & Viisemann (LHV) and two of its employees with fraud in relation to a scheme to steal corporate news release data from Business Wire in advance of the official release.
Estonia's financial watchdog told Reuters it also was mounting its own investigation into the allegations.

In a statement in Tallinn on Wednesday, LHV said it had suspended two employees pending the results of its inquiry. LHV Managing Partner Rain Tamm said his bank neither participated in nor authorised the scheme.

"We have suspended them (the employees) while conducting an internal investigation," Tamm said. "We are cooperating fully with the SEC in order to identify the cause of this situation and to resolve it."

The SEC statement said that Estonian citizens Oliver Peek, 24, and Kristjan Lepik, 28, were charged with the "electronic theft and trading in advance of more than 360 confidential press releases issued by more than 200 U.S. public companies".
Peek and Lepik could not be reached for comment.

According to the complaint, LHV became a Business Wire client in June 2004 and then used a programme to gain unauthorised access to confidential information contained in impending press releases.

LHV said its investment funds and trading accounts were not used in the scheme and that the internal inquiry was focused on five specific customer accounts on its products used by professional traders...

The full article appears here. You can read about the SEC investigation here.

--MDT