On affirmative proof of manipulation of SEMZ ordinary share market
The Bank of Russia has established recurrent and prolonged market manipulations in Moscow Exchange trading with Open Joint-stock Company SEMZ ordinary shares (further referred to as the ‘Shares’), in the period between late 2011 through 2013, conducted by related parties with a view to misleading a wide range of investors with regard to the Shares’ price and liquidity.
Trading operations in the above period were supported by the issuer itself, LLC Dekom and several foreign legal entities (BLUBBERSTAR LIMITED, SKAVADOS ENTERPRISES LIMITED, Transcube Communications GmbH and Vionmane LTD), as well as individuals (V.M. Skubak and I.G. Karmanov). The Share transactions conducted by the above entities equalled to over 70% of the total for the specified period, amounting more than once up to 100% of the daily trading volume.
The check was conducted in coordination with foreign financial market regulators including the Federal Financial Supervisory Authority of Germany and the Securities and Exchange Commission of the Republic of Cyprus.
The Bank of Russia-conducted check established the fact of conspiracy related to transactions with the Shares between BLUBBERSTAR LIMITED, SKAVADOS ENTERPRISES LIMITED, Transcube Communications GmbH, LLC Dekom, OJSC SEMZ, as well as between V.M. Skubak, I.G. Karmanov and Vionmane LTD. These transactions led to material deviations in price, trading volume, supply and demand of the Shares. In keeping with Clause 2, Article 5 of Federal Law No.
It is to be noted that share transactions between V.M. Skubak, I.G. Karmanov and Vionmane LTD were market-making in nature and recognised by the exchange as performed under the professional security market participant’s obligations based on the appropriate contract. At the same time, the provisions of Clause 1, Part 3, Article 5 of the Federal Law are not applicable to V.M. Skubak, I.G. Karmanov and Vionmane LTD. In their capacity as professional security market participants, these entities were not parties to the contract for market-making functions, and their actions therefore could not have been intended for sustaining the Shares’ price, within the framework of this contract.
LLC Dekom, OJSC SEMZ, SKAVADOS ENTERPRISES LIMITED, and BLUBBERSTAR LIMITED, in their turn, were putting orders for purchase of the Shares at the highest prices, including with other market participants, thereby contributing to increase in the Share price. These transactions were intended to mislead market participants as regards the Share price, leading to its material deviations.
According to Clause 6, Part 1, Article 5 of the above-mentioned federal law, such actions are qualified as market manipulation.
The manipulation brought about fake levels of demand, supply, price and trading volume of the Shares.
The Bank of Russia has taken action against the entities engaged in the Share market manipulation, with a view to preventing similar violations in the future.
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22.06.2016 00.00.00