Prosecutors offer deal over Deutsche Boerse boss charges
PROSECUTORS are considering dropping insider trading charges against Deutsche Boerse chief executive Carsten Kengeter and instead imposing fines on the company, the German exchange said yesterday.
Deutsche Boerse said the public prosecutor of Frankfurt was holding out “the prospect” of offering a deal, under which it would have to pay two fines of €5.5m (£4.9m) and €5m.
In return, though, the public prosecutor would “fully terminate proceedings against Mr Kengeter by mutual agreement and without conditions”.
Prosecutors opened the investigation into Mr Kengeter’s actions earlier this year, raiding his home and office in February as part of an investigation concerning €4.5m of Deutsche Boerse stock purchases the chief executive made in December 2015.
Investigators had been looking into whether Mr Kengeter bought the shares while Deutsche Boerse was in secret talks with the London Stock
Exchange.
The two exchanges issued statements in late February 2016 confirming they were in merger talks, though both parties have said talks began in January 2016.
Prosecutors claimed the bourses were in talks from the summer of 2015. They claimed that Mr Kengeter transacted “in the knowledge of previously unpublished contract negotiations, which the public prosecutor considers to be insider information”.
Mr Kengeter has consistently denied the allegations, saying it was the German company’s supervisory board that determined the timing of his share purchases – which were connected to his compensation programme – rather than himself.
“Insider trading goes against everything I stand for,” he told investors at the exchange’s annual meeting in May.
Deutsche Boerse said yesterday that it had been informed that the prosecutor “intends to formally involve the company in the ongoing investigation proceedings”. It said it would review the notification of hearing from the prosecutor, but added it still believed the “allegations made are unfounded in all respects”.
Deutsche Boerse’s third attempt to merge with London Stock Exchange in 17 years was, in effect, blocked by the European Commission’s competition commission earlier this year. The regulator said it would have created a “de facto monopoly in the markets for clearing fixed income instruments” and demanded concessions that the London exchange rejected.