I couldn't believe this when I heard it mentioned on todays Working Lunch. Evolution Beeson Gregory managed to short 252% of the issued capital of it's client, Room Service (now Azure Holdings plc) -
"From 25 September to 21 October 2003, EBG, through Mr Potts, implemented a strategy to short sell shares in Room Service, which resulted in EBG short selling 252% of the issued share capital of Room Service. The strategy was undertaken without a reasonable settlement plan in place to ensure delivery of the shares sold, but in anticipation of Room Service issuing new shares following its AGM on
20 October 2003 thereby allowing demand to be met. The anticipated issue of shares failed to take place and Room Service shares were suspended from AIM on 22 October 2003."and Evolution Beeson Gregorys response -
"Evolution feels that it is unfortunate that it has taken an incident such as this to help produce a clearer understanding of the definition of market abuse."
Duh!
Are they attempting to say that it wasn't clear before, because it was to anyone with any intelligence. A company can only issue share capital that has been subject to prior authorisation.
Daytona