On establishing facts of liquid securities market manipulation by a group of individuals
The Bank of Russia established the fact of manipulation of 46 securities markets during trading on the PJSC Moscow Exchange (the Exchange) in the period between 24 July 2014 and 21 March 2017 by a group of individuals including Evgeniy Tarubarov, managing director of Bonum Capital LLC, professional securities market participant, and his spouse Svetlana Tarubarova.
The Bank of Russia established that Mr Tarubarov conducted transactions both across the accounts held by Bonum Capital LLC and a brokerage account held by his spouse with one of the major professional securities market participants.
These transactions employed the following scheme. Mr Tarubarov used the brokerage account of Mrs Tarubarova to bid for an arm’s length purchase of securities on the Exchange. Then Mr Tarubarov placed a sell order to close the position at a higher price (above the highest demand price). After that, Mr Tarubarov used the accounts of Bonum Capital LLC to place a matching buy order with similar parameters that was largely covered by the bid previously placed through the account of Mrs Tarubarova.
This trading conduct led to substantial deviations in the securities trading parameters.
Thus, Mr Tarubarov could buy and sell securities across the account of Mrs Tarubarova almost without losses and generated excess income amounting to more than 10 million rubles while inflicting a comparable detriment to Bonum Capital LLC and its clients under trust management. The Criminal Code of the Russian Federation qualifies the amount of the illegally obtained income as large.
According to Federal Law No.
It should be noted that Mr Tarubarov was not authorised to conduct transactions on the Exchange on behalf of Bonum Capital LLC, and the above illegal actions proved possible as a result of insufficient control provided by authorised officials of Bonum Capital LLC.
The Bank of Russia will take appropriate corrective measures regarding individuals involved in securities market manipulation, including measures aimed at improving the internal control systems of Bonum Capital LLC.
The materials of the investigation have been submitted to the law enforcement authorities.
The Bank of Russia draws the attention of professional securities market participants to the fact that it is necessary that they effectively control the actions of their employees, create a mechanism to prevent and settle conflicts of interests; inter alia, for the purpose of excluding the possibility of unauthorised access, provided by unauthorised employees, to the software that enables conducting Exchange transactions.
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