Morgan Stanley’s conduct in Nord Pool’s financial market on December 18 and 19 2002 was subject to an investigation by Nord Pool’s market surveillance. Morgan Stanley conducted heavy sales in the course of the last 10-15 minutes before closing of the financial market on these two days.

The question was whether the sale was conducted in such a manner that the purpose was to move the price and not to dispose of volume. Morgan Stanley strongly maintains that the sale was conducted to dispose of volume.

Nord Pool’s market surveillance concluded in its internal investigations in early 2003 that Nord Pool’s rules had been breached. In addition, there was suspicion of breach of the Securities Trading Act and the case was pursuant to the applicable legislation sent to Kredittilsynet.

Kredittilsynet chose to send the matter to Okokrim, which put the case aside because of resource considerations. Subsequently, Kredittilsynet expressed, in a report, criticism of the market conduct without concluding as to whether there was a breach of the Securities Trading Act.

Nord Pool said it had made note of the decision made by Kredittilsynet and Okokrim and has chosen not to pursue the matter further.

It is not unusual at other exchanges that one pursues breaches of own rules, either separately or in addition to public authorities. In line with this, Nord Pool has decided that such cases for the future will be subject to full examination by the exchange itself. This means that in case of suspicion of breach of Nord Pool rules, this will be subject to an independent and separate consideration by Nord Pool.

President and CEO, Torger Lien, emphasized that Nord Pool will now strengthen its own rules with supplementing guidelines with respect to price and market manipulation, insider trading and information requirements.