Euroconsult Sim

On 5 July 2000 the Chairman of Consob adopted a measure suspending the administrative bodies of Euroconsult Sim, with registered office in Milan, for sixty days and appointing Mr. Marco Lori as special administrator to take over its management. The measure specified that during the period of special administration the company had to:

• complete the reconciliation between its balances and those of third parties for the 1999 financial year and for the current year;
• complete the installation of the new data processing, administrative and accounting procedures; and
• plan and put in place internal control mechanisms, with special reference to the activity of the company?s financial salesmen.

The special administrator is required to observe the recommendations contained in Consob Resolution 10579 of 17 March 1997.

The measure was adopted under Article 53.1 of the Consolidated Law on Financial Intermediation, which states that, in situations of danger for customers or markets, the Chairman of Consob may suspend the administrative bodies of a SIM as a matter of urgency and appoint a provisional administrator to take over its management where serious administrative irregularities or serious violations of laws, regulations or bylaws are found.

The suspension was ordered on the basis of the findings of Consob?s supervisory activity, which revealed that the company had committed serious violations of statutory and regulatory provisions.

In particular, shortcomings were found that were capable of adversely affecting the efficient performance of investment services.

The company had accumulated delays in the reconciliation of its accounting records with those of its counterparties and was thus not in a position to keep the accounts of its customers up to date. This had prevented the firm engaged to perform the statutory audit from rendering an opinion on the annual accounts for 1999 and the board of auditors from submitting its report thereon within the prescribed time limit (in Consob Informa n. 29/2000 - 17 July 2000).