(Bloomberg) -- Shares in Hexagon AB sank the most in more than five years after Norwegian authorities said the company's chief executive officer is being investigated for possible breaches of insider trading rules.
The Stockholm-based company's stock fell as much as 11 percent, the steepest intraday decline since August 2011, after the Norwegian economic crime authority said it was looking into CEO Ola Rollen's actions. Lawyers for Rollen described these as personal investments that were unrelated to Hexagon. The technology company, which helps provide measurement solutions for clients including NASA, was trading 8.6 percent lower at 320.60 kronor as of 1:44 p.m. in the Swedish capital.
Ola Rollen
Rollen was detained on Oct. 29, following a decision by the district court in Oslo, to allow the crime authority to secure evidence relevant to the case. According to Rollen's lawyers, the probe relates to the purchase of 284,341 shares in Next Biometrics Group AS in October last year by private-equity fund Greenbridge Partners.
Hexagon Chairman Melker Schorling said he has “complete confidence” in the CEO. Rollen's lawyers said he “firmly denies the accusations” and doesn't admit to any guilt.
“With regard to the ongoing investigation I cannot comment on the specific contents of the charge other than that the charges involve illegal insider trading in a Norwegian company and that the amounts are significant,” Norwegian prosecutor Marianne S. Bender said in a separate statement. “The maximum sentence for insider trading is six years imprisonment.”
The Swedish Economic Crime Authority arrested Rollen on Oct. 26 after a request from Norwegian authorities, according to spokeswoman Katinka Wall. When Rollen held the company's third-quarter earnings conference call on Oct. 28 from Hexagon's headquarters, staff from the Swedish Economic Crime Authority were present. Rollen was subsequently handed over to Norway's crime authorities and appeared in court there on Oct. 29, according to Wall.
While he is detained, Rollen's duties as CEO will be filled by Robert Belkic, Hexagon's chief financial officer, the company said. Rollen's detainment is due to end on Nov. 4, according to his lawyers.
To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net. To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Kim Robert McLaughlin
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