Consob fines Intermonte for Il Sole 24 Ore
How and why Consob fined Intermonte for the Sole 24 Ore accounts. Emanuela Rossi's article
Another piece in the affair on the accounts of the Sole 24 Ore group that led to a criminal case against the former leaders, including the then CEO Donatella Treu, and the former editor-in-chief of the newspaper, Roberto Napoletano. This time Intermonte Sim , the independent investment bank founded in 1995 accused – according to Consob – of having presented researches with false and misleading data for the choices of professional and retail investors.
It should be remembered that the Commission chaired by Paolo Savona in September 2019 imposed a maxi fine of 280 thousand euros on both Treu and Napoletano because the altered numbers presented between 2013 and 2016 "produced a false information picture of the economic and financial situation" of the group. On the other hand, the position of the company had been filed, which however was jointly and severally liable for the payment of the overall fine, over 1 million euros, also considering the amount owed by the other three managers of the group.
WHAT HAPPENED WITH INTERMONTE
From February 2014 to the end of 2017, Intermonte had a corporate broking contract with Il Sole 24 Ore to produce at least two searches a year on the occasion of the publication of the operating results and half-yearly data and to draw up commentary notes on the occasion of the quarterly results . The company's duties also include organizing, taking into account the availability of the group's management, at least two meetings a year with professional investors. For this assignment, Intermonte received 50 thousand euros plus VAT every year. In the period in question it published 12 studies in Il Sole 24 Ore which all contained, with the exception of the one published on 12 October 2016, an Outperform operating judgment, determined by the definition of a target price higher than the market price. These are researches that were then distributed to the intermediary's institutional investors, reworked and disseminated to the retail public of Websim, a division of Intermonte that carries out research and production of information content for retail purposes, sent and published on the institutional website. of Borsa Italiana SpA
In addition, Consob reported in its resolution in recent days, these searches were used as a “control method for calculating presumptions in the assessment of the impairment test on goodwill”. On 27 May 2016, the Intermonte research office published a research in Il Sole 24 Ore containing a target price of 0.65 cents and an Outperform rating. The analyst who signed the research, Simone Pozzi, established that the fair value, or the intrinsic value of the Il Sole 24 Ore share, was 0.36 cents, a level well below the target price indicated in the research. published by Intermonte on 21 March 2016, when it was equal to 0.70 cents, and informed Alberto Villa, head of the research department. Despite this, Intermonte published the research containing a target price of 0.65 cents: it should be noted – highlights the Commission chaired by Paolo Savona – that if the target price of 0.36 euro had been indicated, the operating judgment would have been, based on of Intermonte's internal rating system, equal to Sell.
Therefore, according to Consob, the research of May 27, 2016 "was characterized by elements of falsehood, indicating a target price of € 0.65 and an operating opinion of Outperform instead of € 0.36 and Sell respectively, corresponding to the valuations" of the analyst. In a nutshell, these elements “were likely to provide false and misleading information regarding the financial instruments issued by Il Sole 24 Ore . Among other things, this false representation was likely to positively and misleadingly influence the choices of professional and retail investors and positively influence the calculation of the impairment test by persons designated by the group.
The Commission chaired by Paolo Savona in the resolution notes that "the distorting effects deriving from the publication of the research dated 27 May 2016 were likely to continue to provide, in line with previous research, a positive signal on the future prospects of Il Sole 24 Ore, although the economic and equity results published on 12 May 2016 after the close of the first quarter of 2016 showed the financial analysts of Intermonte a situation in marked deterioration compared to the estimates made previously ".
WHAT CONSOB HAS DECIDED
A situation that has arisen, particularly serious because, writes Consob, "the publication of the research of May 27, 2016 (…) continued to provide, in line with previous research, a positive signal on the future prospects of the company, although the The economic and financial results of Il Sole 24 Ore published on 12 May 2016, after the close of the first quarter of 2016, had highlighted to the Intermonte analysts a situation that was clearly worsening compared to the estimates made previously ". In short, the research failed to “contribute to improving the transparency and efficiency of the market itself, reducing the levels of information asymmetry”. The Consob resolution therefore provided for an administrative sanction of 30 thousand euros for Villa and an additional three-month interdictory sanction; an administrative sanction of 20 thousand euros for Pozzi and an accessory disqualification sanction of two months. Intermonte, which is jointly and severally liable with Villa and Pozzi also for their penalties, an administrative fine of 50 thousand euros is applied to be paid within 30 days of notification of the provision.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/consob-multa-intermonte-per-il-sole-24-ore/ on Fri, 02 Apr 2021 08:45:01 +0000.