Facts of manipulation in market for PJSC UCS’s ordinary shares established

The Bank of Russia has established facts of manipulation in the market for PJSC UCS’s ordinary shares (hereinafter, the Shares) over the period from July 2017 to December 2017 at exchange trading.

Transactions with the Shares were settled in collusion by the clients of one and the same professional securities market participant: KIT Finance Trade (LLC) (TIN 7840471255), LLC StroyStalKonstruktsiya (TIN 7806380311), LLC EUROMAX (TIN 7731579315), Vitaly Demyanenko, and Irina Litvinova.

LLC StroyStalKonstruktsiya, LLC EUROMAX, Vitaly Demyanenko, and Irina Litvinova (hereinafter, the Persons) regularly conducted transactions with the Shares using the same mechanism. Each of the above Persons purchased the Shares, predominantly from KIT Finance Trade (LLC), in the main trading mode of the exchange. Then, each of them concluded one over-the-counter transaction with KIT Finance Trade (LLC) to sell back the acquired block of the Shares, but at a price exceeding the purchase price in the main trading mode of the exchange.

The said transactions with the Shares causing significant deviations in trading parameters almost completely formed the market for the Shares over the period under review.

Moreover, the Persons concluded no other transactions with the Shares after closing their positions.

KIT Finance Trade (LLC) placed orders to conduct transactions with the Shares based on a contract with the professional securities market participant acting as a market maker for the Shares (hereinafter, the market maker). However, exemptions provided for by Part 3 Article 5 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, Federal Law No. 224-FZ) are not applicable to KIT Finance Trade (LLC) since the said entity was not a party to the contract on acting as a market maker, and its actions could not have been aimed at maintaining the trading of the Shares for the purpose of fulfilment of the relevant contract. In addition, the said transactions with the Shares were conducted on behalf of KIT Finance Trade (LLC) by employees of the market maker based on the issued powers of attorney.

In accordance with Clause 2 Part 1 Article 5 of Federal Law No. 224-FZ, the transactions with the Shares concluded by KIT Finance Trade (LLC) with the Persons qualify as manipulation in the market for the Shares. Thus, LLC StroyStalKonstruktsiya, LLC EUROMAX, Vitaly Demyanenko, Irina Litvinova, and KIT Finance Trade (LLC) violated the prohibition stipulated by Part 2 Article 6 of Federal Law No. 224-FZ.

The Bank of Russia has sent orders to desist from similar violations in the future to LLC StroyStalKonstruktsiya, LLC EUROMAX, Vitaly Demyanenko, Irina Litvinova, and KIT Finance Trade (LLC).

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