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2022: CBR caught Evraz and KPMG employees in insider transactions
November 2, 2022 Central Bank of the Russian Federation announced the establishment of the facts of illegal use of insider information by the group's employees Evraz KMPG and in the implementation of transactions with ordinary shares of PJSC "."Raspadskaya
According to the regulator's statement, Dmitry Smolin, an employee of the KPMG audit company, Narine Mamaryan, an employee of the Evraz metallurgical holding, and her close relatives took part in insider trading. By the beginning of November 2022, trade on their accounts was stopped.
In the second half of 2020, Evraz consolidated its coal assets on the basis of Raspadskaya PJSC. The mine bought Yuzhkuzbassugol and offered shareholders who disagreed with this decision to buy back shares from them at a price of 164 rubles per share. Insiders gained access to this information before its disclosure and bought shares in advance at quotations significantly lower than 164 rubles per share.
Шаблон:Quote 'Evraz provided full assistance to the Bank of Russia within the framework of the investigation, - said the representative of the holding. According to him, the company took appropriate measures to prevent the misuse of insider information.
According to the Central Bank, the audit also established improper execution by Raspadskaya, EvrazHolding and KPMG during the period under review of the requirements of Federal Law No. 224-FZ, including in terms of taking measures to prevent, identify and suppress the illegal use of insider information and (or) market manipulation.
The regulator in its message explained that the information on the decisions of the board of directors before its publication was insider information. It was "accurate and specific in nature," contained the market value of shares determined by an independent appraiser for redemption purposes, and could have a significant impact on the market prices of securities in organized trading if distributed.[1]
2018: Approval for passage of the bill
The State Duma Committee on the Financial Market at a meeting approved in July 2018 for adoption in the second reading a bill on countering the illegal use of insider information.
As stated in the approved deputy amendments, Article 14 (powers of the Bank of Russia) of the Federal Law 224 "On Countering the Misuse of Insider Information" is supplemented by a new clause. According to the new provision, employees of the Central Bank, within the framework of their powers and upon presentation of official certificates, "have the right to unhindered access" to the premises of legal entities, bodies and organizations in order to conduct inspections.
The amendments stipulate that the Central Bank will not be able to gain access to the premises of bodies carrying out operational-search activities, as well as home to individuals.
The Central Bank will be able to access any information, with the exception of information that constitutes state and tax secrets, communication secrets (except for information on postal transfers of funds). Access to electronic media is possible "in compliance with the rules on the protection of personal data." At the same time, employees of the Central Bank have the right to demand acts, contracts, certificates, business correspondence.
Field inspections are possible on the basis of a decision by the head of the Central Bank or his deputy. "To access documents and property of organizations, the consent of the head of the organization is necessary," said the head of the committee Anatoly Aksakov.
The amendments to the insider law approved for adoption in the second reading expand the regulator's ability to establish the facts of insider trading and manipulation and combat them. The second reading of the bill in the Duma is scheduled for July 24, 2018.
2011: The law came into force on the territory of the Russian Federation
In Russia, on January 27, 2011, the Law "On Countering the Misuse of Insider Information and Market Manipulation and on Amending Certain Legislative Acts of the Russian Federation" entered into force. It is aimed at consolidating the system of measures to counter the misuse of insider information and market manipulation, strengthening the protection of the rights and legitimate interests of investors.
The document introduces a list of insiders, mechanisms for controlling the use of insider information, establishes requirements for the disclosure of insider information, the rights and obligations of issuers and trade organizers, including issuers are obliged to keep lists of insiders. The law clarifies the requirements for internal control of financial market participants and the work standards of regulatory authorities.
The document defines the functions and powers of the federal executive body in the field of financial markets (FFMS) in terms of conducting relevant inspections, bringing to justice for violation of the requirements of the law; interaction with law enforcement agencies when identifying and investigating facts of unfair activities; access to information on bank accounts of professional securities market participants and management companies.
Measures are also established to prevent, identify and suppress the misuse of insider information and market manipulation: restrictions on the use, consequences of the use of insider information and market manipulation; procedure and terms of disclosure or provision of such information, as well as the obligation to notify insiders about the operations of the federal executive body in the field of financial markets.
The Criminal Code of the Russian Federation introduces an article "illegal use of insider information," providing for liability in the form of a fine from 300 thousand to 500 thousand rubles or in the amount of the convict's salary or other income for a period of 1 to 3 years, or imprisonment for a term of 2 to 4 years with a fine of up to 50 thousand rubles or in the amount of the convict's salary or other income for a period of up to 3 months or without it with the deprivation of the right to hold certain positions or engage in certain activities for up to 3 years or without it.
The Federal Service for Financial Markets (FSFM) will determine a comprehensive list of insider information. A list of potential insiders has been established. They recognize the leadership of the Central Bank of the Russian Federation, members of the National Banking Council, the leadership of all government services and departments. Administrative and criminal liability is provided for the deliberate misuse of insider information. There is a general provision that a person who unlawfully used inside information who disseminated false information is not liable if he did not know that such information is inside information, and common information is false.
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