Facts of misuse of insider information in equity transactions during on-exchange trading established
Based on the findings of an investigation, the Bank of Russia has established facts of misuse of insider information by Kirill G. Sokolov, an insider of a public joint-stock company (hereinafter, the Issuer) whose shares are listed on Moscow Exchange. As of the moment of his illegal actions, K. G. Sokolov held the position of the executive director – chief of the investor relations centre.
K. G. Sokolov conducted 185 transactions to purchase and sell the Issuer’s ordinary and preferred shares, taking advantage of the insider information about future payments of dividends for 2022.
The amount of dividends, which the Issuer specified in the data about the decision made by the Supervisory Board regarding the distribution of the Issuer’s net profit to be submitted for approval to the annual general meeting of shareholders, significantly surpassed investors’ expectations. These data had a considerable impact on the price of the Issuer’s shares in on-exchange trading.
Having gained access to the insider information in connection with his job duties and being aware of the importance of these data, K. G. Sokolov notably increased his stake in the Issuer’s equity. After the official disclosure of the insider information, K. G. Sokolov performed a series of transactions to sell the earlier acquired shares thus locking in profits.
The Bank of Russia qualifies these actions as a breach of the ban on using insider information stipulated by Clause 1 of Part 1 of Article 6 of Federal Law No. 224-FZ.1
The Bank of Russia has sent binding orders to K. G. Sokolov to cease and desist from similar violations in the future.
The Bank of Russia urges issuers and other legal entities listed in Part 1 of Article 3 of Federal Law No.
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