OREANDA-NEWS. December 10, 2015. The Bank of Russia has established the facts of continued and repeated manipulation with the market for investment units of the closed-end unit investment hedge fund Altair and the closed-end unit investment hedge fund Iskona managed by AMC GPI, limited liability company (hereinafter, the Funds), at auctions held by MICEX Stock Exchange, closed joint-stock company, in 2011 to 2013.

Trading activities in the markets of the aforementioned units were maintained through pre-agreed transactions by a group of interconnected entities: HFL Finance LLC, Eco-Engineering LLC, JSCB FINPROMBANK PJSC, Palreco Ltd, and UM Finance Ltd, also having links with issuers of bonds, which had made up the Funds’ property, i.e., Ecolive Ltd and Yorkland Holdings Ltd, and with the persons who had invested these bonds in the Funds’ property.

The volume of pre-agreed transactions between these entities amounted to over 95% of total trades in units of the closed-end unit investment hedge fund Altair and 82% of total trades in units of the closed-end unit investment hedge fund Iskona in the period under review.

Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the transactions conducted by the aforementioned entities in the period under review with units of the hedge funds Altair and Iskona, which caused substantial deviations in prices and/or trade volumes of the said units, may be qualified as market manipulation.

The Bank of Russia has established that JSCB FINPROMBANK PJSC made long-term investments in the Funds’ units and over a long period of time kept their records at a value based on the results of transactions with the Funds’ units at auctions held by MICEX Stock Exchange CJSC, without making loss provisions.

The facts revealed and the procedure for and the quality of assessing the Funds’ property indicate that the latter were set up in the interests of beneficiaries from the scheme of establishing unit markets not related to investing in Ecolive Ltd and Yorkland Holdings Ltd.

Market manipulation is a flagrant violation of the Russian Federation legislation.

Persons involved in the transactions by HFL Finance LLC and UM Finance Ltd, which resulted in market manipulation with the Funds’ units, had their qualification certificates of financial market specialists cancelled.

The Bank of Russia also forwarded to persons involved in market manipulation instructions to prevent similar violations in the future.