Leonteq shares hammered after FT report on unusual trading activity (updated)

Leonteq AG

11/10/2022 11:21

(Adds Leonteq comment, analyst, details)
       MILAN, Oct 11 (Reuters) - Leonteq  LEON.S  shares headed
for their biggest two-day drop in six years on Tuesday, losing
as much as a quarter of their market value in that time, after
the Financial Times reported on unusual trading activity at the
Swiss fintech company.
    The FT reported on Monday that whistleblowers have accused
auditor EY of whitewashing suspicious trades including money
laundering and tax evasion in an investigation it conducted this
year for Leonteq, a long-standing client.
    Leonteq said in a comment emailed to Reuters it had "a
strict zero tolerance policy regarding non-compliant business
behaviour" and that the allegations were "managed, monitored and
reported with due care and process". It added that
investigations by Leonteq and EY found there "were no material
shortcomings".
        EY was not immediately available for comment.
  
    At the core of the complaints reported by the FT are two
trades that Leonteq created for French workers co-operative
society ID Formation at the start of 2021. 
        The whistleblowers said the trades, which involved large
commissions routed to a British Virgin Islands company, should
have been reported to French authorities, the FT said.
  
    Its shares fell another 7% at one point in Zurich on
Tuesday, giving the company a market capitalisation of less than
700 million Swiss francs ($701 million). By 1019 GMT, the stock
was down 6. Since Friday's close, the shares have lost over 24%,
marking the biggest two-day drop since late 2016.
    Analysts called for greater clarity.
    "Publication of the EY report or an additional appraisal
through an external auditor would provide urgently needed
visibility. Forecasts still call for record results for the full
year," said Christian Schmidiger at Zürcher Kantonalbank.
        ($1 = 0.9991 Swiss francs)
 (Reporting by Danilo Masoni; Editing by Amanda Cooper)
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))