Based on the findings of investigations, the Bank of Russia has established facts of market manipulation in transactions with futures and options contracts in on-exchange trading.
At the end of 2022, Moscow Exchange held the contest The Best Private Investor (hereinafter, the Contest). The main criterion to evaluate results in the category The Best Trader in Futures Linked to the Moscow Real Estate Index DomClick was earnings received by participants in the Contest from transactions with futures linked to the said index.
During the period of the Contest, Lyubov A. Ognevaya, Alexander N. Ognevoy, and Yevgeny A. Ognevoy (the latter did not take part in the Contest), who are relatives, conducted reciprocal transactions with futures contracts linked to the Moscow Real Estate Index DomClick (HOME-9.22, HOME-12.22) as well as—on 1 August 2022—with a futures contract linked to ordinary shares of PSC Magnit (MGNT-9.22).
Furthermore, during the period of the Contest, Vladimir V. Karkov and Lyudmila G. Naymushina conducted reciprocal transactions with a futures contract linked to the Moscow Real Estate Index DomClick (HOME-12.22), margin call options on a futures contract linked to the Moscow Real Estate Index DomClick (HOME-12.22M211222CA17000, HOME-12.22M211222CA25000, HOME-12.22M211222CA25500) and a margin put option on a futures contract linked to the Moscow Real Estate Index DomClick (HOME-12.22M211222PA42000).
Moscow Exchange’s contest commission negated the results of L.A. Ognevaya, A.N. Ognevoy, V.V. Karkov and L.G. Naymushina in the Contest.
According to the findings of the investigation, these individuals conducted their transactions in collusion, causing significant deviations in trading amounts. The purpose of these reciprocal transactions was to win the Contest.
These transactions are qualified as market manipulation pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter Federal Law No. 224-FZ).
Thus, L.A. Ognevaya, A.N. Ognevoy, Y.A. Ognevoy, V.V Karkov and L.G Naymushina violated the prohibition stipulated by Part 2 of Article 6 of Federal Law No. 224-FZ. The Bank of Russia has sent binding orders to these individuals to cease and desist from similar violations in future.
The Bank of Russia emphasizes that it is not allowed to conduct transactions in collusion in an anonymous trading environment where transactions are carried out based on bids addressed to all trading participants if information about bidders as well as bid beneficiaries is not disclosed to any other trading participants.
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