Hungarian investors want full reparation as brokerage falls

AP News
Posted: Apr 11, 2015 1:42 PM
Hungarian investors want full reparation as brokerage falls

BUDAPEST, Hungary (AP) — Hundreds of people who invested in a collapsed brokerage in Hungary demanded on Saturday that the government compensate fully for their losses.

Some 400 investors protested outside an office of the Quaestor brokerage, supervised since last month by the National Bank of Hungary after it was suspected of issuing some 150 billion forints (505 million euros, $535 million) in unauthorized bonds.

The investors say the government failed to protect their money because of lax financial oversight.

"We are people who have suffered damages and are close to a nervous breakdown," said Istvan Kalman-Piko, one of the protesting investors urging Prime Minister Viktor Orban to speed up the compensation process.

The governing Fidesz party has proposed raising the maximum compensation amount from 20,000 euros to 100,000 euros per investor. But Orban said the banking sector, which would have to provide the extra funds, needed to be consulted first.

If approved, the Fidesz proposal would return principal investments to most of the approximately 32,000 people who invested with Quaestor.

Several protesters highlighted politicians' personal ties to Quaestor's main owner, Csaba Tarsoly.

"Quaestor had a symbiotic relationship with the state and those now in power," said Kalman-Piko. "The operations of the state and private businesses must be kept separate."

Tarsoly was involved in several projects with the state, including a trade office set up in Moscow in 2013 meant to boost Hungarian exports to Russia.

When its problems were revealed in mid-March, Queastor became the third Hungarian brokerage to be investigated for fraud within a few weeks.