Insiders caught on the assessment – Newspaper Kommersant No. 205 (7406) dated 03.11.
[ad_1]
For the first time in four years, the Central Bank announced a new discovery of the fact of insider trading. For the first time, among the insiders was an employee of a consulting firm that evaluated securities. Experts note that in Russia the attitude towards such incidents is still much more loyal than in Western countries.
The Bank of Russia published details of insider trading in Raspadskaya shares in November 2020. According to the regulator, KPMG employee Dmitry Smolin, EvrazHolding employee Narine Mamaryan, as well as her husband and other close relatives Evgeny Panov, Kristina Mamaryan and Greta Petrosyan were involved in the case.
According to the regulator, when Evraz consolidated the coal mining business within PJSC Raspadskaya, these persons learned insider information about the upcoming purchase of 100% of the authorized capital of Yuzhkuzbassugol. In particular, they found out the market valuation of the shares, which significantly exceeded the current quotes. For several days, the mentioned citizens bought shares below the buyback price, and sold them on the rise.
The news about the terms of the deal was published on November 13, 2020. According to the Moscow Exchange, four days before, the company’s shares rose from 114 rubles. to 131 rubles, and at the time of publication soared by more than 17%, exceeding 153 rubles, and remained at this level for several more days. The Bank of Russia did not respond to a request from Kommersant about the amount of income received by insiders.
Cases of revealing insider trading are rare in the practice of the Central Bank. The previous one was reported four and a half years ago (see “Kommersant” dated May 29, 2018).
In total, only seven cases have been identified since 2010.
This time, for the first time, an employee of a consulting company that evaluated securities was among the insiders. As stated in the Kept company (former KPMG), Dmitry Smolin worked there “in an ordinary position” until 2021. The company, they assure her, cooperated with the Central Bank during the investigation, “after which they changed the employee responsible for internal control and significantly strengthened this function.” Evraz also says that it provided “full assistance to the Bank of Russia as part of the investigation” and took measures “to prevent the misuse of insider information.”
Market participants believe that such cases of insider trading “can be investigated more quickly.” A Kommersant source in the financial market believes that “the circle of people who bought and then sold shares, knowing the inside, could have been identified much earlier.” Moreover, “the range of people found – an appraiser, an employee of the issuer – is not so wide as to search for him for two years,” he believes. At the same time, Valery Lyakh, director of the Central Bank’s department for combating unfair practices, told Prime in March 2021, “the accusation of manipulation and insider knowledge is too serious.” And it is important for the regulator to be sure “completely, and not to assume,” therefore, “checks and the collection of supporting materials take time.”
Attitudes towards such situations in Russia and in the West are still radically different, says Ekaterina Makeeva, head of the sanctions practice at A-Pro.
According to her, not every case of insider trading or price manipulation is of interest to the Central Bank. According to the regulator, 35% of investigations end up establishing the fact of using insider information. However, Elena Belyaeva, an analyst at Freedom Finance Global, clarifies that despite the fact that the corresponding law was adopted in the United States in 1934, the first judicial precedent took place only in 1966. At the same time, Kommersant’s interlocutors admit that in the case of Raspadskaya’s papers, “everything will end only with an order.”
Experts say that in Russia, in general, the approach to punishment for insider trading is more lenient than in other countries. Moreover, in August, an instruction from the Bank of Russia came into force, which allows companies and individuals to avoid administrative measures for violating anti-insider legislation by entering into an agreement with the regulator.
These agreements imply the payment of a certain amount to the budget and the adoption of measures to prevent such derogations in the future. For an individual, the amount cannot be less than 5 thousand rubles, for an official – less than 30 thousand rubles. In the United States, according to Ekaterina Makeeva, only payment to informers can amount to millions of dollars:
“The SEC last reported a payout to an investor whistleblower on October 31st. Details were not disclosed, but the amount of the reward was more than $10 million.”
Market participants, meanwhile, doubt that it will be possible to completely eradicate insider trading even if the punishment is tougher, since “it is based on human weaknesses, on the desire to earn easy money.”
[ad_2]
Source link
