The Federal Service for Financial Markets of Russia (the "FSFM") has announced that it has commenced the first ever criminal proceedings for market abuse. As a result of an inspection conducted by the FSFM, it was established that there had been manipulation of the price of ordinary shares of Tatbento OJSC during the trading on MICEX Stock Exchange.
The FSFM overall monitoring system detected some price manipulation signs which, together with the claim of one of the trading participant, prompted an inspection by the FSFM. The manipulation took place in the end of 2010 and was conducted by several clients of Tatbento OJSC, one of them being the company's founding member. In that period the common stock price rose by half.
This is the first time in Russia when a potential event of market abuse has led to actual criminal proceedings being brought.
The Russian Criminal Code, as amended by Federal Law No. 224-FZ dated 27 July 2010, provides for a punishment of up to 7 years' imprisonment for serious securities market abuse.