The Financial Supervisory Authority of Norway (FSAN) has revoked the licence of brokerage Terra Securities, the company involved in selling disputed commercial papers to Norwegian townships.
Terra Securities announced their decision to file for bankruptcy after the decision by the FSAN to revoke their license and the immediate suspension of their shares trading on the Oslo stock exchange.
Terra Securities is currently embroiled in a dispute in which northern townships Rana, Hemnes, Hattfjelldal and Narvik claim they were systematically tricked and misled into investing public funds into high-risk bonds.
“Consideration for future customers in the securities market is a major reason for the Kredittilsynet now notifying the revocation of licences for Terra Securities,” says Skogstad Aamo, director, FSAN.
Terra Securities is owned by Terra Markets, which in turn is partially owned by the Terra Group, which is owned by 78 Norwegian savings banks. It remains unclear how much money the four northern townships have lost in their dealings with Terra. Four new municipalities, Kvinesdal, Bremanger, Vik and Haugesund, have signaled they would also take action against Terra for being sold complex high-risk products without full information. Ola Sundt Ravnestad, CEO of the Terra Group, resigned on Wednesday as a result of the scandal.