Russia Opens First Stock Price Fixing Case

Russian law-enforcement agencies have launched the country’s first criminal case into stock market price manipulation, following a check by the Federal Financial Markets Service (FFMS), the regulator said on Wednesday.

The check revealed manipulation of the price of ordinary shares issued by Tatbento, a company registered in the Volga Republic of Tatarstan, traded on the MICEX-RTS Stock Exchange. Prices were fixed from September to December 2010 by several Tatbento customers, including one of the company’s founders, the FFMS said.

“During this period, the price of Tatbento ordinary shares grew 50 percent. The check was carried out following a request by a stock market trader following signs of manipulation revealed by the regulator’s comprehensive system of monitoring Tatbento shares,” the FFMS said.

Tatbento mines clay and kaolin, and is also involved in pre-fabricated assembly of buildings and manufacture of ceramic tiles.

After Russia adopted a law on fighting the illegitimate use of insider information and market manipulation in January 2011, the FFMS developed methodology for calculating demand and supply and volume of trade in liquid and illiquid securities, which in turn can reveal irregularities possibly caused by illegal manipulation.

The FFMS estimates the largest number of transactions showing signs of price fixing are conducted with low-liquid or illiquid securities.


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