Facts of market manipulation in transactions with certain financial instruments established

The Bank of Russia has established facts of market manipulation during on-exchange trades in certain securities on the part of Boris V. Smirnov using his own trade account in 2023–2024.

Mr Smirnov used the pump and dump strategy: first, he bought low-liquid assets at artificially inflated prices making aggressive purchase bids (with a significant shift in prices, which caused considerable deviations in asset prices), and then he sold the asset package at such inflated prices. During one trading session, he used to resort to this scheme repeatedly, which usually brought positive financial results.

This trading activity was regular in the markets of a range of securities and led to spikes in their volatility, increasing financial risks for other participants in on-exchange trading.

According to the findings of the investigation, transactions performed by Mr Smirnov with 14 securities¹ using his own account are qualified as market manipulation pursuant to Clause 5 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).

Additionally, Mr Smirnov, being the administrator of the Telegram channel Fibo Trade (hereinafter, the Channel) with over 13,000 subscribers, used the Channel to publish knowingly false information about his trade in securities of one type (for example, buying), which led to changes in prices for a range of securities and to significant deviations of other trading parameters in the market. Then, he actually conducted reverse transactions (for example, selling). There were also instances when Mr Smirnov posted information in the Channel about his plans to trade in specific securities, however, he did not execute them. Moreover, after the publication of such information in the Channel, the market of respective securities saw an increase in the number of trading participants.

Such publications in the Channel and the trading activity of Mr Smirnov that contradicted them could be repeated several times per trading session for one security thereby leading to excessive volatility of respective assets.² The above actions also produced a positive financial result for Mr Smirnov.

These actions are qualified as market manipulation pursuant to Clause 1 of Part 1 of Article 5 of Federal Law No. 224-FZ.

Thus, Mr Smirnov breached the ban stipulated by Part 2 of Article 6 of Federal Law No. 224-FZ.

Mr Smirnov is subject to administrative proceedings for market manipulation. The Bank of Russia has sent binding orders to Mr Smirnov to cease and desist from similar violations in the future.

Additionally, the Bank of Russia has sent binding orders to professional securities market participants, Moscow Exchange and PJSC SPB Exchange to suspend on-exchange trades and operations using the trading accounts of Mr Smirnov.

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