On establishing facts of securities market manipulation by V. Prokhor and Alpari LLC (OOO Alpari)
The Bank of Russia has established facts of repeated market manipulation on the Moscow Exchange (hereinafter the Exchange) with regard to trades in the ordinary shares of PJSC Human Stem Cells Institute (PAO ISKCh), PJSC Rostelecom (PAO Rostelecom), PJSC Chelyabinsk Profiled Steel Decking Factory (PAO ChZPSN-Profnastil), JSB AVANGARD (PAO AKB Avangard), PJSC Volgogradenergosbyt (PAO Volgogradenergosbyt), PJSC Uniform Techno Systems (PAO ETS), PJSC Vladimirenergosbyt (PAO Vladimirenergosbyt) and also preferred shares of PJSC Volgogradenergosbyt (hereinafter the Shares) during the period from 3 August 2015 through 25 December 2015 by Viktor G. Prokhor and Alpari LLC (TIN: 3904602244, Kaliningrad).
Transactions with the Shares conducted by V. Prokhor and Alpari LLC resulted in significant deviations in their trading parameters.
The analysis of the trading behaviour of V. Prokhor and Alpari LLC in the securities market established that series of transactions were executed in the main trading mode of the Exchange according to the following scheme. As the result of one or several trades, V. Prokhor bought a certain block of the Shares from Alpari LLC; that was followed by one or several trades with the same number of the Shares at a higher price conducted in the opposite direction. These trades were conducted against matching orders having similar parameters and with minimum difference in time, being placed from the same personal computer.
It is important to note that during the period under investigation, V. Prokhor and Alpari LLC acted as key counterparties in the trades with the Shares.
In the course of the investigation, the Bank of Russia established that V. Prokhor, being the authorised representative and beneficial owner of Alpari LLC, was individually conducting transactions in the main trading mode of the Exchange across the account held by Alpari LLC and his own account.
As a result of these transactions, V. Prokhor achieved positive financial result by inducing comparable damage to Alpari LLC. These actions were able to optimise the tax burden of the company. Information about the actions of V. Prokhor and Alpari LLC was forwarded to the Federal Tax Service.
These actions are qualified as the Share market manipulation in accordance with Article 5, Section 1.2 of Federal Law No.
Based on the outcome of the investigation, the Bank of Russia took measures to prevent market manipulation by V. Prokhor and Alpari LLC.
Professional securities market participants are recommended to consider the probability of the above actions being performed by their clients when implementing internal control compliance procedures, as well as to inform their clients about the inadmissibility of such transactions.
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