The Bank of Russia has established facts of illegal use of insider information by insiders of Sistema Public Joint Stock Financial Corporation (PAO AFK Sistema, further referred to as ‘the Company’), namely, A. N. Buyanov, N. K. Nosova and A. Yu. Goncharuk conducting transactions in ordinary shares of the Company for their own account and on their behalf in July 2014.
Such transactions were found to have been conducted only several hours before the Company formally disclosed its insider information. As a result, the Company shares dropped more than 7% on the Moscow Exchange.
The information obtained in the course of the investigation suggests that the above individuals gained access to the Company’s insider information. The way the instructions to effect transactions were submitted, along with the trading behaviour, provide evidence to the fact that these individuals were conducting transactions in the shares of Sistema PJSFC for their own account using illegally the insider information they obtained.
These transactions enabled the above individuals to avoid material loss amounting to a total of tens of millions rubles.
The use of insider information with a view to conducting transactions in financial instruments is in breach of requirements set forth in Article 6 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’.
The Bank of Russia has submitted the materials related to the investigation to the law enforcement authorities of the Russian Federation.