Steinhoff probe in Germany

The German Financial Market Authority has launched a formal open-ended investigation into insider trading at Steinhoff following a precursory analysis that was completed towards the end of January.

The Bundesanstalt für Finanzdienstleistungsaufsicht in Germany (commonly referred to as BaFin) initiated a routine analysis into insider-trading of the shares of Steinhoff following the implosion of the share price in the wake of the announcement by the company that it was investigating accounting irregularities.

This preliminary investigation was completed towards the end of January at which time BaFin opened a formal investigation into market manipulation and insider trading. This process is open-ended and there was no evidence (at the time) that there was any violation of the law.

BaFin stated simply: “We are currently conducting an investigation into the suspicion of market abuse in the securities of Steinhoff AG.”

This corresponds with the announcement that the Financial Services Board (FSB) was also investigating two cases of possible insider trading involving Steinhoff and one case of possible false and misleading reporting.

Solly Keetse, head of department, Directorate of Market Abuse at the FSB, said that while the FSB is not coordinating its investigation with BaFin: “The FSB merely requested assistance from BaFin with obtaining information in regard to Steinhoff” through a mechanism that allows regulators around the world to share information that allows for better regulation of financial markets.

Meanwhile, an investigation that was launched two years ago by prosecutors in Oldenburg, Lower Saxony, of former and current managers of Steinhoff for tax evasion, document falsification and fraud is still ongoing.