Hungarian National Bank Takes Control of Buda-Cash Broker

Budapest-based Buda-Cash Brokerhaz Zrt. had its broker’s license revoked and was taken control of by Hungary’s central bank on Tuesday on suspicion that the broker had cooked the books for several decades, manipulating data on amounts received from clients.

Some $37 million (10 billion forint) in client losses are expected, precipitated by the unpegging of the Swiss franc in January. As much as $371 million (100 billion forint) in assets are unaccounted for by the firm.

A commissioner has now been appointed by the central bank to control Buda-Cash’s operation, which served 15,000-20,000 investors and had roughly four percent of the market share in spot equities trading in 2014. The brokerage was also a white-label for Saxo Bank.

The investigation may also have ramifications for around 100,000-120,000 clients in four regional lenders that share ownership with Buda-Cash, according to the Hungarian central bank’s vice president, Laszlo Windisch. Until the investigation is over, investors’ funds will be frozen.

The four banks are: Dél-Dunantuli Regionális Bank (DRB), Észak-magyarországi Regionális Bank (ERB), Dél-Dunantuli Takarék Bank (DDB) and Buda Regionális Bank (BRB). It is reported that the central bank has placed a ceiling of 1 million forint on withdrawals from the banks.

“We don’t have a clear picture yet, only a very strong suspicion,” said Windisch. “The steps are necessary to clarify the situation and avoid further damage.”

According to a statement on the brokerage’s website, it has stopped taking transaction orders and isn’t providing client services. A state investor insurance fund does, however, cover clients up to 20,000 euros ($22,652). Depositors are guaranteed up to 100,000 euros ($113,455).

(Photo: flickr)

bitcoin
Bitcoin (BTC) $ 35,943.00 0.91%
ethereum
Ethereum (ETH) $ 2,253.41 0.70%
tether
Tether (USDT) $ 1.02 1.00%
binance-coin
Binance Coin (BNB) $ 340.33 0.48%
cardano
Cardano (ADA) $ 1.45 1.88%
dogecoin
Dogecoin (DOGE) $ 0.286709 2.23%
xrp
XRP (XRP) $ 0.766274 3.25%
usd-coin
USD Coin (USDC) $ 1.00 0.26%
polkadot
Polkadot (DOT) $ 20.91 0.05%
uniswap
Uniswap (UNI) $ 20.81 1.32%
S&P 500  ^GSPC 
$4,166.45  $55.41  (-1.31%)
Dow Jones Industrial Average  ^DJI 
$33,290.08  $533.32  (-1.58%)
NASDAQ Composite  ^IXIC 
$14,030.38  $131.02  (-0.93%)
Russell 2000  ^RUT 
$2,237.75  $49.71  (-2.17%)
Crude Oil Jul 21  F*CL.NYM 
$71.14  $0.1500  (-0.21%)
   
$0.0000  $0.0000  (0.00%)