Final Word from Wednesday, April 16, 2014

The CNB is investigating an increase in trading in ČEZ shares prior to the announcement by Andrej Babiš in HN on March 24 that he is considering a 100% dividend payout. When we first wrote about this on March 26, we focused on the conversations HN's reporters had with analysts, and we let ČEZ itself off the hook. Its spokesman, Ladislav Kříž, also apparently learned of Babiš's idea before it was released to the general public. This means that Babiš, HN, ČEZ, Patria and any other analysts contacted by HN could have theoretically traded on the information. The CNB can, and should, investigate the criminal aspect of the case, but there is also a journalistic aspect. HN has remained mum so far about its possible breach, other than a few indignant remarks on Twitter, but it needs to explain its rules for handling price-sensitive information and state whether its journalists adhered to them in this case. [Czech Republic National Bank Hospodářské noviny Economia finance ministry minister Finance Direct]

Glossary of difficult words

insider information - a non-public fact regarding the plans or condition of a publicly traded company that could provide a financial advantage when used to buy or sell shares in the company;

to let someone off the hook - to allow someone to escape from a difficult situation;

to remain/keep mum - to keep silent, esp. so as not to reveal a secret;

breach - an act of breaking or failing to observe a law, agreement or code of conduct;

indignant - feeling or showing anger or annoyance at what is perceived as unfair treatment.

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