Banking

National Congress passes new law on certain financial activities

On December 22, 2011 the National Congress passed Law No. 26,733 (the “Law”), which, based on a bill proposed by the Argentine President, imposes criminal sanctions for certain unauthorized financial activities.


In particular, the Law provides for criminal punishments for certain activities that until the enactment of this Law were only banned from an administrative perspective, specifically:

(i) Fraudulent manipulation of the prices of merchandise;

(ii) Misrepresentation of sales, income, losses or other accounting indicators contained in reports or information releases to shareholders or board of directors, as a way to improve the financial situation of a company;

(iii) Insider trading and self dealing by insiders (including members of the board of directors, surveillance committee, shareholders and their representatives) and tippers;

(iv) Fraudulent manipulation of securities;

(v) Financial intermediation and soliciting of funds without a license;

(vi) Unlicensed intermediation services for the purchase of securities;

(vii) Fraudulent accounting; and

(viii) Receipt by representatives of financial entities of payments or any other economic benefit in exchange for acceptance or execution of credit, financial or securities transactions.

In addition, the Law provides that where the criminal actions referred above are performed on behalf of, with the participation of, or for the benefit of a legal entity, such entity will be subject to criminal punishments too.

The Law broadens the scope of the prohibited activities by providing criminal punishment for: (i) the soliciting of funds from the public for purposes of purchasing securities in general (and not limited to the solicitation of bank deposits), and (ii) the performance of intermediation services for the purchase of securities.


For further information on this topic please contact Carlos M. Melhem and Jorge I. Mayora