Insiders will go to prison

The Government has proposed changes to the Criminal Code punishing illicit activity on the stock market.

If the bill becomes the law insider trading would be a criminal offence penalised by a fine of up to 1 mln roubles (~USD30,000) or imprisonment for up to six years. Price manipulation by means of mass media will send the offender to jail for 7 years.

In January the State Duma increased liability for the market participants. The law 'On Securities Markets' and other acts have been amended. In particular, the new article 'Price Manipulation on the Stock Market' was added to the Administrative Code setting surprisingly light fines for the offenders.

According to the representatives of the Federal Service for Financial Markets, the national regulator of securities markets, fines are not sufficient to stop illicit activity.

In modern Russian history only twice companies have been charged with manipulation on the stock market.

 

 

February 11, 2009