The decision to investigate initial public offerings is a consequence of the large number of complaints filed with the Financial Supervision about the allocation of shares in connection with the privatization and initial public offering of the state-owned telecommunications company Sonera Group. In November 1998, the state sold approximately 22% of the shares in Sonera Group to Finnish and foreign investors.
For the purpose of its investigations the Financial Supervision intends to review the allocation principles as well as non-public documentation relating to the book-building process. The Financial Supervision is legally entitled to obtain all the documents and records relating to a supervised entity or its customers for inspection.
Pursuant to the Finnish Securities Market Act, an investment firm has a general obligation to treat its clients equally in connection with public offerings of securities and otherwise when providing investment services. The Financial Supervision guidelines in force as of January 1 1999 regarding the application of the Securities Market Act provide that all investors be given equal possibilities to participate in a public offering. Further, the prospectus must, according to such guidelines, contain sufficient information on the allocation of securities between, inter alia, institutional investors and retail investors.