Rus­sia al­leges Deutsche em­ployee ma­nip­u­lated mar­kets with $5bn of trades

Kuwait Times - - BUSINESS -

MOSCOW: Rus­sia’s cen­tral bank al­leged that a banker at Deutsche Bank’s Rus­sian branch had ma­nip­u­lated mar­kets by con­duct­ing 300 bil­lion rou­bles ($4.87 bil­lion) of trades with rel­a­tives over two and a half years.

The cen­tral bank said the trades, made be­tween Jan­uary 2013 and July 2015, had gen­er­ated a profit of 255 mil­lion rou­bles for Deutsche Bank em­ployee Yuri Khilov and three rel­a­tives. The Rus­sian cen­tral bank said it had passed its find­ings to law en­force­ment for their as­sess­ment of what had hap­pened.

The cen­tral bank’s in­ves­ti­ga­tion was con­ducted with help from Ger­many’s Fed­eral Fi­nan­cial Su­per­vi­sory Author­ity. It is sep­a­rate from an in­ves­ti­ga­tion into so-called “mir­ror trades” in­volv­ing Deutsche’s Moscow of­fice which could have al­lowed clients to move money from one coun­try to an­other with­out alert­ing author­i­ties in 2014. A Deutsche spokesman said the bank had con­ducted an in­ter­nal in­ves­ti­ga­tion into the ac­tiv­i­ties of Khilov, who he said was a for­mer Deutsche em­ployee. Deutsche has pro­vided its find­ings to the mar­ket reg­u­la­tor and will co­op­er­ate closely with author­i­ties, the spokesman said.

Khilov did not im­me­di­ately re­spond to a mes­sage seek­ing com­ment. The Rus­sian cen­tral bank’s find­ings are an em­bar­rass­ment for Ger­many’s flag­ship lender, which re­cently cut back its in­vest­ment bank­ing ac­tiv­i­ties in Rus­sia.

Deutsche is also fac­ing a large penalty in the United States for al­legedly mis­lead­ing in­vestors when sell­ing mort­gage-backed se­cu­ri­ties. It was not clear whether Deutsche will be fined in Rus­sia over the trades in­volv­ing Khilov.

The Rus­sian cen­tral bank al­leged in a state­ment that Khilov and his rel­a­tives had ma­nip­u­lated trad­ing in eight se­cu­ri­ties on the Moscow Ex­change. Act­ing on be­half of Deutsche’s Lon­don branch, Khilov made trades which were favourable to his rel­a­tives and in do­ing so ma­nip­u­lated mar­kets, the state­ment said. — Reuters

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