The judge of the National Court José Luis Calama has admitted a complaint from the Anti-Corruption Prosecutor’s Office to investigate Gotham City, the firm specialized in betting on the downside against companies, for allegedly releasing “biased and misleading information” to the financial market about the credibility of Grifols to induce its investors to sell the shares of this pharmaceutical company. And, consequently, cause a drop in the price that would generate a benefit for both Gotham and General Industrial Partners LLP (GIP), the other company denounced.
The facts are set out in a complaint filed by the Anti-Corruption Prosecutor’s Office for a possible crime against the market and consumers. The order includes the messages published by Gotham between January 8 and 9 on the social network Twitter, currently X, which included a report on Grifols that drastically concluded that the pharmaceutical company’s shares were worth 0 euros. As a consequence of this report, on the same day, January 9, Grifols shares reached losses of 3,814 million euros before the close of the session.
In that same document, the judge adds, Gotham reported that it is a subsidiary of General Industrial Partners LP and that it maintained a “short” position in Grifols, greater than 0.5% of the share capital. After the publication of the Gotham report, its short position was drastically reduced to 0.06%.
Operating in “short positions”, explains Calama, involves selling shares that you do not own and that have been borrowed, to sell them advantageously, having to subsequently buy in order to return the borrowed shares. The profit lies in the difference between the sale price of the shares and the purchase price of the shares (or repurchase of what was sold). This operation, the order indicates, meant for GIP a capital gain of more than 9.4 million euros.
The magistrate considers that the requirements are met to investigate the crime related to the market and consumers as it is “a dissemination of news or rumors about a commercial company – in this case about Grifols – that would contain totally or partially false economic data with the potential to alter or preserve the trading price of said company, and, furthermore, the losses and profits occurred within the scope of operation of the false data disseminated.”
The first steps that the judge agrees on consist of requiring the CNMV to present in Spanish all the documents that it sent to the Anti-Corruption Prosecutor’s Office. In addition, the magistrate orders the Judicial Police of the National Court to locate the addresses of the five defendants responsible for Gotham, including Daniel Yu and Cyrus de Weck, and GIP, as well as the two denounced companies.
Calama offers Grifols the possibility of presenting itself as aggrieved and requires it to present a copy of the lawsuit that it filed for these events before the District Court of New York, as well as its extension, which the magistrate has heard from the media. Additionally, ask Grifols if it has filed a complaint regarding these events with the American and British organizations that are responsible for supervising the securities and financial markets in these countries.
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