Facts of manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established (27.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established
The Bank of Russia has established facts of manipulation in the market for ordinary shares of OJSC TRANSAERO Airlines (hereinafter, the ‘Shares’) in 2014–2015 at exchange trading.
The Bank of Russia paid attention to the deals conducted between customers of two professional securities market participants.
In the period under review, Jeimbo Cyprus Limited (registered in Cyprus) and Otkritie Advisory Services Limited (registered in the Islands of Bermuda) regularly conducted transactions with the Shares, which resulted in substantial deviations in their trade parameters, almost single-handedly forming the market of the Shares. In addition to exchange transactions, Jeimbo Cyprus Limited and Otkritie Advisory Services Limited entered into reverse OTC transactions.
Instructions to perform transactions on the part of Jeimbo Cyprus Limited were submitted by employees of OJSC TRANSAERO Airlines who were also employed by Jeimbo Cyprus Limited.
Taking into account the financial situation of OJSC TRANSAERO Airlines in the period under review, it was necessary for OJSC TRANSAERO Airlines to create an illusion of trading activity and maintain prices of Shares further used as collateral to borrow funds, which was also conducted through its subsidiary, Jeimbo Cyprus Limited.
Therefore, in accordance with 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, the ‘Federal Law’), deals with Shares entered into by Otkritie Advisory Services Limited and Jeimbo Cyprus Limited qualify as market manipulation. The above-mentioned persons violated the prohibition set out by Part 2 of Article 6 of the Federal Law.
The circumstances, in which the deals with Shares were made, were established thanks to the cooperation between the Bank of Russia and financial market regulators from the UK (Financial Conduct Authority), the Republic of Cyprus (Cyprus Securities and Exchange Commission), and the Islands of Bermuda (Bermuda Monetary Authority) in line with the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO MMoU).
The Bank of Russia has taken measures to prevent market manipulation in further activities of Jeimbo Cyprus Limited. Otkritie Advisory Services Limited is no longer operating.

27 June 2019
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