Our recent reports on the activities of the local regulator in Cyprus, CySEC, which has under its command the regulation of the forex and binary options industries in the jurisdiction of Cyprus have been favourable as the Commission was overcoming the bad press it had previously received and was stepping up its pace with the aim of better regulating the operations of brokers and better protecting their clients. Alas, however, CySEC made headlines again last Friday for all the wrong reasons as its Chairwoman Demetra Kalogirou found her name embroiled in a case of a mysterious SMS which was sent in bulk in Cyprus, just hours before the country’s parliament was to vote on the crucial foreclosures bill, the passing of which is a pre-requisite for the approval by the country’s international lenders of the next installment of the financial aid package that the country secured last March.
According to an announcement on the CySEC website posted on Friday, Ms. Kalogirou “complained to Police today, regarding the spreading of malicious phone messages (SMS) which seems to refer to her as the sender. Ms. Kalogirou condemns this action and emphatically asserts that she has nothing to do with that message and highly misleading content.”
More specifically, the sms was supposedly addressed to a friend of Ms. Kalogirou, urging her to rush to withdraw her money from the country’s biggest bank, the Bank of Cyprus, because another haircut of deposits or even the closing down of the bank were imminent. The news caused massive reactions in Cyprus as both the political leadership and the people saw the spreading of such rumours as a criminal act that could have disastrous effects on the overall economy and especially on the wellbeing of the banking system, during this crucial period and especially in view of the stress tests to be carried out by the ECB.
Following Ms. Kalogirou’s complaint the police arrested a suspect and is further investigating the matter in order to clarify what really went on. In the meantime, and following many discussions and procrastinations the country’s parliament approved the controversial foreclosures bill on Saturday afternoon.