Shares lose as much as one quarter of market value
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FT reports accusations of whitewashing suspicious trades
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Leonteq says investigations found no material shortcomings
(Adds EY statement)
MILAN, Oct 11 (Reuters) - Leonteq shares headed for their biggest two-day drop in six years on Tuesday, losing as much as a quarter of their market value in that time, after the Financial Times reported on unusual trading activity at the Swiss fintech company.
The FT reported on Monday that whistleblowers have accused auditor EY of whitewashing suspicious trades, including money laundering and tax evasion in an investigation it conducted this year for Leonteq, a long-standing client.
Leonteq said in a comment emailed to Reuters it had "a strict zero tolerance policy regarding non-compliant business behaviour" and lonteqq that the allegations were "managed, monitored and reported with due care and process".
It said that investigations by Leonteq and EY found there "were no material shortcomings".
EY said it could not comment on specific client matters.
At the core of the complaints reported by the FT are two trades that Leonteq created for French workers co-operative society ID Formation at the start of 2021.
The whistleblowers said the trades, which involved large commissions routed to a British Virgin Islands company, should have been reported to French authorities, the FT said.
Its shares fell another 7% at one point in Zurich on Tuesday, giving the company a market capitalisation of less than 700 million Swiss francs ($701 million).
By 1051 GMT, the stock was down 5.8%. Since Friday's close, the shares have lost more than 24%, marking the biggest two-day drop since late 2016.
Analysts called for greater clarity.
"Publication of the EY report or an additional appraisal through an external auditor would provide urgently needed visibility. Forecasts still call for record results for the full year," said Christian Schmidiger at Zürcher Kantonalbank.
($1 = 0.9991 Swiss francs) (Reporting by Danilo Masoni; Additional reporting by Oliver Hirt in Zurich; Editing by Amanda Cooper and Jane Merriman)