Facts of manipulation in market for bonds offered with LLC USC’s involvement established

The Bank of Russia has established facts of market manipulation in on-exchange trading at Moscow Exchange and PJSC SPB Exchange in transactions with 19 issues of corporate high-yield bonds¹ (hereinafter, the Bonds) over the period from 12 December 2018 to 13 April 2023 (hereinafter, the Period). The issue of the Bonds was organised by Limited liability company UniService Capital (LLC USC).²

LLC USC and its CEO A. V. Antipin with the involvement of LLC USC’s employees A. A. Melekhov and I. A. Rozhkov organised a scheme to manage brokerage accounts of a number of individuals and legal entities and implemented the scheme over the Period. Using LLC USC’s IT infrastructure, they conducted reciprocal transactions between controlled accounts to create and maintain liquidity in the market for the Bonds, among other purposes. This facilitated the development of LLC USC’s activity as an offering organiser and helped support the circulation of the issues in on-exchange trading and expand the list of issuers willing to cooperate with LLC USC as an intermediary to raise financing by issuing debt liabilities.

The investigation has revealed that LLC USC and A. V. Antipin managed third parties’ brokerage accounts with their holders’ informal consent without any legal grounds. A considerable proportion of the reciprocal transactions conducted in collusion between the controlled accounts caused significant deviations in the demand for, supply, price and trading amount of the Bonds. 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).

The controlled accounts included, among others, the brokerage accounts of V. V. Piksaev and LLC UniMetriks whom the Bank of Russia earlier subjected to administrative measures for market manipulation under similar circumstances. Their involvement in another accounts management scheme organised by LLC USC and A. V. Antipin is evidence that their actions to manipulate the market were deliberate.

LLC USC, A. V. Antipin and V. V. Piksaev are subject to administrative liability. The Bank of Russia has sent binding orders to the above persons as well as A. A. Melekhov, I. A. Rozhkov and LLC UniMetriks to cease and desist from similar violations in the future. The transactions on the trading accounts of the persons involved in the scheme have been suspended.

Moreover, the investigation has identified cross transactions conducted by M. A. Akulshin in the market for the bonds of Ferroni, LLC.³ M. A. Akulshin aimed to transfer the liquidity between his accounts opened with different brokers. A number of such cross transactions caused significant deviations in the demand for, supply and trading amount of the bonds and are qualified as market manipulation in accordance with Clause 3 of Part 1 of Article 5 of Federal Law No. 224-FZ.

The Bank of Russia has sent the binding order to M. A. Akulshin to cease and desist from similar violations in the future and suspended transactions on his trading accounts.

The Bank of Russia warns professional securities market participants’ clients that the transfer of management of their funds to persons without relevant licences involves risks and they should not allow anyone to access their brokerage accounts without a duly executed power of attorney.

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