Hungarian regulators take control of troubled brokerage; third case in recent weeks

MarketsAssociated Press

The National Bank of Hungary says it has sent a supervisor to take control of a brokerage whose license was partially suspended and which is suspected of issuing far more bonds than allowed.

The NBH, which recently took on the added role of financial watchdog, said Tuesday the Quaestor brokerage couldn't take on new clients but the supervisor would be allowed to close open positions.

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Quaestor is suspected of issuing bonds for up to 150 billion forints ($524 million) above its issuance program of 60 billion forints ($210 million).

Quaestor initially blamed its liquidity problems on investors' loss of confidence after authorities said Buda-Cash, another brokerage, couldn't account for 100 billion forints ($350 million) of its clients' funds.

Quaestor is the third Hungarian brokerage to be investigated in recent weeks.