Facts of market manipulation in transactions with PJSC LC Europlan’s bonds established

The Bank of Russia, in coordination with Public Joint Stock Company ‘Leasing company Europlan’ (PJSC LC Europlan) (hereinafter, the Issuer) has established facts of market manipulation in transactions with the Issuer’s bonds¹ (hereinafter, the Bonds) in on-exchange trading.

The transactions with the Bonds qualified as market manipulation were conducted in collusion during the period from 22 April 2022 to 6 May 2022 between former director general of LLC Europlan Service² A. S. Mikhailov, his wife A. A. Mikhailova, acting as the sellers, and former investment director of PJSC LC Europlan³ D. A. Dolgikh issuing orders for LLC Europlan Service’s brokerage account.

The investigation has revealed that, shortly before the transactions with the Bonds, A. S. Mikhailov and D. A. Dolgikh phoned each other to agree upon issuing simultaneous matching orders and transaction parameters.

All the transactions with the Bonds were conducted based on simultaneously issued matching orders with similar parameters and caused significant deviations in demand, supply, prices, and the trading amount from the levels that would have formed if not for such transactions. The time lag between the orders for the above transactions was less than a minute, while the transactions with the Bonds conducted on the specified dates between the said individuals in most cases accounted for more than 90% of the overall amount of trading in these securities.

Taking advantage of the non-market scheme for issuing orders for the transactions with the Bonds, A. S. Mikhailov and A. A. Mikhailova earned over ₽16 million and over ₽15 million, respectively. LLC Europlan Service’s loss totalled at least ₽31 million.

These transactions are qualified as market manipulation 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, Federal Law No. 224-FZ).

Thus, A. S. Mikhailov, A. A. Mikhailova, and D. A. Dolgikh violated the prohibition stipulated by Part 2 of Article 6 of Federal Law No. 224-FZ.

The Bank of Russia has sent binding orders to the above individuals to cease and desist from similar violations in the future.

The materials of the investigation have been submitted to the law enforcement authorities.

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