Swedish biometrics firm Fingerprint Cards, a global market leader in biometric sensor technology for smartphones, announced on Monday (Jan. 23) that the company’s former chief executive officer and a current board member had both been taken into police custody on suspicion of aggravated insider trading.
According to Reuters, the Swedish Economic Crime Authority carried out house searches and arrested two people as part of an ongoing investigation into reports of abnormal trading. Fingerprint Cards named the two men as board member Lars Soderfjell and former CEO Johan Carlstrom.
A substantial amount of shares were allegedly sold before Fingerprint Cards’ profit warning back in early December of last year. Bloomberg said the profit warning subsequently resulted in a loss of nearly 18 percent in Fingerprint’s stock value.
“We take very seriously these events and the information that now has come to our attention. We are, of course, cooperating with the Swedish Economic Crime Authority,” Fingerprint Cards Chairman Jan Wareby was quoted as saying in a statement. Additionally, Fingerprint Cards said it had yet to make a decision regarding Soderfjell’s participation on the board.
Carlstrom had reportedly resigned in May 2015, said Bloomberg, following charges of alleged insider trading between Dec. 2012 and March 2014, among other legal actions.
Fingerprint Cards’ shares were down over 6 percent after news of the latest arrests broke. In December, the company cut its revenue forecast for 2016, said Reuters, after overestimating the demand for its smartphone touch sensors.
Last year, Fingerprint Cards had forecast that the total addressable market for the “other segments” part of its business would grow to reach nearly 100 million sensors in 2017 and would hit approximately 500 million in 2018.
In late 2015, Fingerprint Cards saw a massive increase in demand after it had outfitted China’s Huawei smartphone with its fingerprint sensors. In 2015 alone, Fingerprint Cards’ shares jumped up by more than 1,000 percent.
Reuters now reports that Soderfjell was released from custody today, and has denied the allegations of insider trading levied against him. Former CEO Carlstrom has also denied the allegations of insider trading, though there has been no official word on his release from custody as of yet.