On Establishing Fact of Equity Market Manipulation
OREANDA-NEWS. The Bank of Russia established a fact of manipulating markets of ordinary shares of OJSC OC Rosneft, ordinary and preference shares of OJSC Rostelecom, ordinary shares of OJSC RusHydro, ordinary and preference shares of OJSC Sberbank of Russia, ordinary shares of OJSC Surgutneftegas, ordinary shares of OJSC Tatneft, and ordinary shares of OJSC OC LUKOIL (hereinafter jointly referred to as the Equity) during the trading session on CJSC MICEX SE from 1 February 2012 to 1 October 2013.
The Bank of Russia inspection established facts bearing evidence of preliminary arrangement between Ursa Capital LLC, CB Transportny LLC, INRESBANK LLC, acting on its own behalf, customers of INRESBANK LLC: OJSC JSCB MOSOBLBANK, RIK LLC, RSD LLC, CB Finance Business Bank LLC, and Ye.L. Shepelev, a customer of another professional participant, on conducting transactions with the Equity, which resulted in considerable deviations in the Equity trading volume, supply and demand.
On certain days the share of bargains between the above-mentioned entities stood at 20-67%of the Equity trading volume. Thus, the manipulation resulted in artificial level of demand, supply and trading volume of such tradings.
Pursuant to Federal Law No. 224-FZ, dated 27 July 2010, 'On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation', the actions taken by Ursa Capital LLC, CB Transportny LLC, INRESBANK LLC, OJSC JSCB MOSOBLBANK, RIK LLC, RSD LLC, CB Finance Business Bank LLC, and Ye.L. Shepelev by prior arrangement and resulted in significant deviation in the Equity trading volume, supply and demand, are considered to be market manipulation. The said actions are a gross violation of the Russian legislation standards.
It should be noted that INRESBANK LLC, OJSC JSCB MOSOBLBANK and CB Finance Business Bank LLC manipulated the Equity market before the Bank of Russia took a decision on their financial rehabilitation. Former major shareholders of these organisations were excluded from the ownership and management of these banks. Taking the above-mentioned into account, the Bank of Russia will not take any administrative measures with regard to the listed credit institutions. Meanwhile, the Bank of Russia cancelled qualification certificates of financial market specialists of the officials directly involved in the Equity market manipulation. These officials were discharged from their offices at the said organisations.
The Bank of Russia cancelled licences to carry out professional activity in the securities market of other legal entities, professional securities market participants, which manipulated the Equity markets.
The Bank of Russia sent the persons who had manipulated the Equity markets, instructions on non-admission of similar violations in future.
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