On established facts of securities market manipulation by A. Kh. Lyulinsky
The Bank of Russia established multiple and continuous facts of market manipulation, on MICEX, in 31 securities in the period from 18 March 2011 through 9 December 2016.
Mr Artem Kh. Lyulinsky in his capacity as PJSC AK BARS’s employee and being authorised by JSC Investment Company AK BARS Finans, acting pursuant to an agreement on the fiduciary management of this credit institution’s assets, simultaneously conducted transactions across the said organisations’ accounts and his own brokerage account held with one of the major professional securities market participants.
To execute the above transactions, the following arrangements were used. Mr Lyulinsky opened a buy or an unsecured sell position on certain securities. Within a short time, he placed an order witha hidden volume to close this position at a beneficial price. Following this, on behalf of the credit institution or its trustee, Mr Lyulinsky initiated transactions with the same securities in the direction which ensured a price level beneficial to him. Most of Mr Lyulinsky’s orders were fulfilled by orders he submitted on behalf of PJSC AK BARS or JSC Investment Company AK BARS Finans. In this way, Mr Lyulinsky had the opportunity to sell and buy the securities within several minutes, incurring profits in his own brokerage account.
This trading behaviour resulted in short-term substantial fluctuations in the prices of financial instruments, as well as significant deviations in their trading parameters, and allowed Mr Lyulinsky to gain dozens of millions of rubles in profits by having caused detriment to PJSC AK BARS in the amount equivalent to the profits.
The transactions in securities conducted by Mr Lyulinsky in the above period for his own account as well as on behalf of the credit institution and its trustee, which resulted in a substantial deviation in the securities trading parameteres, are qualified as market manipulation, and thus, constitute a breach of the prohibition set forth by Article 6, Section 2 of Federal Law No.
In accordance with the Criminal Code of the Russian Federation, the illegal profits earned in the above period from market manipulation with the said securities is classified as exceptionally large profits.
The Bank of Russia will take appropriate action regarding Mr Lyulinsky to prevent similar violations in the future.
The Bank of Russia will send the relevant investigation materials to the law enforcement authorities.
The reference to the Press Service is mandatory if you intend to use this material.