Thursday, November 29, 2007

Not so firma Terra

Terra Securities Declares Bankruptcy
Norwegian investment house Terra Securities ASA declared bankruptcy Wednesday after national regulators moved to revoke its license for failing to inform townships of the high risks of their U.S. investments.

Four small townships in northern Norway had been embroiled in a conflict with Terra over losses, saying the brokerage failed to inform them of the high risk of 451 million kroner ($82 million) in investments placed through Citibank.

In a news release, the Financial Supervisory Authority of Norway, a government agency, notified Terra that it intended to revoke all of its licenses to manage investments in Norway. The ruling, which does not affect other companies in the Terra Group, accused the securities unit of "serious and systematic violations of good business practices."

"Terra Securities ASA has failed to provide information about significant risks in advance of the townships investments and has offered products to a target group that the products were not suited for," the agency said.

Without the licenses, Terra Securities cannot continue to operate. It informed the Oslo stock exchange it was shutting down immediately and filing for bankruptcy.

See, Leaking like a SIV.


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