Bank of Russia reveals facts of manipulation in markets of PJSC Mechel’s ordinary and preferred shares and market of PJSC Irkutskenergo’s ordinary shares

The Bank of Russia has established facts of manipulation in the markets of ordinary and preferred shares of PJSC Mechel and the market of ordinary shares of PJSC Irkutskenergo (hereinafter collectively, the Stock) at on-exchange trading in February — May 2017.

The investigation performed by the Bank of Russia has revealed that the clients of the same professional securities market participant (hereinafter, the Broker) Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina carried out transactions in collusion in the main Stock trading mode. Moreover, in a number of cases, Roman Sinitsin conducted similar Stock transactions using a brokerage account opened with another professional securities market participant.

The analysis of the said persons’ trading behaviour has shown that the Stock transactions between Roman Sinitsin and Andrey Sinitsin, as well as between Roman Sinitsin and Anna Sinitsina were made based on orders submitted with a minimum time difference and having identical price and volume parameters. In addition, these Stock transactions were carried out solely to achieve the trading goals of the above persons and their actions were not related to the Stock issuers.

In the absolute majority of cases, the said transactions caused substantial deviations in the Stock trading volume.

Pursuant to Clause 2 of Part 1 of Article 5 of 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’ (hereinafter, the Federal Law), these actions taken by Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina are qualified as Stock market manipulation, which is a breach of the ban imposed subject to Part 2 of Article 6 of the Federal Law.

As of the moment of the above Stock transactions, Roman Sinitsin was controller of the market of the Broker’s securities, which enabled him to conceal these facts when preparing the reporting to be submitted to the Broker’s management bodies and the Bank of Russia.

The Bank of Russia has taken measures in relation to Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina aimed at preventing similar actions in future.

The Bank of Russia has also made the decision to invalidate the qualification certificates of a financial market specialist issued to Roman Sinitsin.

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