At a press conference held last week Győr’s city notary, Szilárd Lipovits, announced that Győr’s local government used Quaestor’s brokerage to purchase HUF 999,987,373 (USD 3.625 million) of Hungarian government bonds on 16 January 2015, the day after the National Bank of Switzerland allowed the Swiss franc to strengthen some 20 percent against the Euro.
Lipovits said Quaestor’s brokerage was chosen in a closed bidding that involved several companies. According to Lipovits, Quaestor “offered the best returns”. 444.hu points out that the problem with Lipovits’ argument is that Hungarian government bonds offer the same return everywhere.
According to the Hungarian news portal, it is much more likely that Quaestor needed some help. The sudden appreciation of the Swiss franc caused brokerage houses such as Quaestor and Buda-Cash to suffer losses in the billions of forints. In the case of Buda-Cash, the damage was around HUF 6-8 billion (USD 22-29 million).
According to 444.hu, the Swiss National Bank’s move may have also hurt Quaestor, driving the brokerage to look for a badly needed injection of capital with which to keep its pyramid scheme going. The following day, Győr wired nearly HUF 1 billion to Quaestor allegedly for the purpose of purchasing Hungarian government bonds.
444.hu notes that the city council minutes make no mention of the decision to purchase government bonds, which may mean that Győr’s mayor decided on his own to transfer the funds.
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