The Bank of Russia has uncovered the misuse of insider information by Alexey A. Lazutin and Linda L. Lazutina in transactions involving the ordinary shares of Public Joint Stock Company MGKL (PJSC MGKL). According to the investigation, Mr. Lazutin, as director general of PJSC MGKL, signed the company’s annual financial statements for 2023 on February 21, 2024. This gave him access to insider information about an increase in net profit for that year.
Between March 6 and March 26, 2024, Mr. Lazutin used this insider information to conduct 478 transactions to purchase shares. Despite a prohibitive period set by PJSC MGKL from March 9 to April 10, during which no transactions were allowed before the publication of the financial statements, Mr. Lazutin continued his activities.
The financial statements were published on April 8, 2024, revealing insider information that significantly impacted share prices. Following this release, Mr. Lazutin sold the previously acquired shares at a higher price than he had paid.
The investigation also found that Mr. Lazutin transferred funds to his spouse, Ms. Lazutina, who then conducted her own share transactions using insider information. Ms. Lazutina began purchasing shares on March 5 and continued until April 3, selling them at a profit after the disclosure of insider information.
The Bank of Russia has determined that both individuals illegally used PJSC MGKL’s insider information and has classified their actions as violations under Federal Law No. 224-FZ1. Both have been held administratively liable for these breaches.
Additionally, binding orders have been issued to Mr. Lazutin and Ms. Lazutina to prevent future violations and instructions have been sent to securities market participants and exchanges to suspend any transactions on their brokerage accounts.
“The Bank of Russia emphasises that an issuer’s insiders and persons related to them are not allowed to use insider information in transactions they conduct.”
