Arctic Securities was the facilitator and financial advisor in connection with the IPO and share issue in Atlantic Sapphire.
The corporate-heavy investment bank has been among the biggest optimists on behalf of Atlantic Sapphire, led by a price target of NOK 175 and an optimistic BUY recommendation. However, the price target was slashed by NOK 45 last Thursday, following a series of setbacks from the pioneering company in Miami.
Arctic Securities has close ties to Atlantic Sapphire. The investment bank was a financial adviser in connection with the company’s share issue and stock exchange introduction. Arctic has also worked as a market maker to strengthen equity liquidity. Furthermore, Arctic has received fees for banking services from the company, albeit not in the last 12 months.
Atlantic Sapphire has long been and remains a popular stock with the bankers of Arctic Securities. The disclaimer in last week’s analysis also stated that “Arctic may have positions in the company”.
The Financial Supervisory Authority of Norway (Finanstilsynet) issued a devastating report on Monday for the investment bank and its head of analysis Morten Nystrøm, who had traded shares before he and the analysis department sent out positive analyses about the same shares, wrote the newspaper Dagens Næringsliv.
Finanstilsynet’s report came after the audit examined Arctic’s entire analysis department. Finanstilsynet concluded that Arctic “has not oriented its activities in such a way that the risk of conflicts of interest between the enterprise and its customers or its customers among themselves is limited to a minimum.”
But Finanstilsynet has not finished.
“Finanstilsynet is currently working on a further thematic inspection at Arctic Securities, limited to information management and order documentation, as well as self-dealing conducted by employees in the Sales and Corporate Finance departments,” Finanstilsynet’s director of market supervision Anne Merethe Bellamy told Dagens Næringsliv.
“Sales” means stockbrockers and “Corporate finance” means financial advisors, and is the department that assists companies in collecting money, IPOs, mergers and acquisitions, sales and other advice.
The stockbrockers are particularly active. And Atlantic Sapphire is among the favorites.
Stockbroker Alexander Borgen holds over one million shares in Atlantic Sapphire, according to a transcript from the Brønnøysund Register Centre. The shares are divided between his two investment companies Borgano (636,394 shares) and SP Capital (365,140 shares). Another stockbroker, Esten Løkkebakken, owns 10,000 shares in Atlantic Sapphire via his company Mara Capital. Stockbroker Morten Aarnseth privately owns 6,000 shares in the land-based salmon farmer.
In total, the Arctic brokers with it are among the seven largest owners in Atlantic Sapphire.
Atlantic Sapphire has been getting a lot of momentum on the Oslo Stock Exchange recently. On Monday, the share price fell another 2.4 per-cent, to NOK 87.80.