RBC sent inquiries to Kazakhstan's Freedom Finance, Tsifra Broker and W-Empirical Holding Corp.
Posted: Mon Jan 20, 2025 7:07 am
deceiving the algorithm of one of the market participants. They made fictitious transactions to buy American shares at a reduced price and sell them at a higher price.
The Investigative Committee has opened a criminal case against Russian investors who manipulated prices of foreign shares by deceiving a trading robot belonging to the financial company W-Empirical Holding Corp. (registered in the USA). The case was opened under Part 4 of Article 159 of the Criminal Code (fraud russia whatsapp resourcecommitted by an organized group of persons). According to the investigation, the actions of the accused resulted in losses of more than 150 million rubles for W-Empirical Holding. RBC has reviewed a copy of the indictment in this case; its authenticity was confirmed by two sources familiar with the trial materials.
W-Empirical Holding acted as a market maker under an agreement with the broker Freedom Finance (in October 2022, it left Russia, the business was transferred to a new owner, the company was renamed Tsifra Broker). A market maker is a special trading participant that maintains the trading of financial instruments in an active state: its activity is necessary so that an investor wishing to buy or sell securities can always find a counterparty for a market transaction, even in the absence of counter offers at a certain point in time.
The case materials state that in 2022, at least two people - V.I. Zinchenko and S.P. Kuleshov - using accounts in Freedom Finance and another unidentified financial organization, carried out fictitious transactions with low-liquidity American securities, first unreasonably reducing their price, and then increasing it.
The market maker's algorithm worked on artificially set prices for securities and first sold the securities to the accused at a lower price, and then bought them back from them at a higher price. The spread (difference) between cheaper and more expensive transactions from February to May 2022 provided the participants in the scheme with an illegal income of 154.6 million rubles. As another source familiar with the case told RBC, Kuleshov and Zinchenko are not the only ones accused of such manipulations.
How the scheme was prepared
The case materials against Kuleshov state that in early February 2022, Zinchenko received information about the operating algorithm of the market maker, W-Empirical Holding Corp.
Zinchenko approached Kuleshov and asked him to open a brokerage account and a depository account with Freedom Finance, as well as a bank account. Funds in the amount of 6 million rubles were deposited into the brokerage account so that Kuleshov could obtain the status of a qualified investor (without which it is impossible to make transactions with low-liquidity foreign securities). He then passed on his account details to Zinchenko, for which the latter promised to pay him 30 thousand rubles monthly. Subsequently, Kuleshov withdrew money from the accounts and transferred it to Zinchenko through intermediaries, and also met with representatives of Freedom Finance - the case materials indicate that Kuleshov tried to distance himself from such a meeting, but still went to it at the insistence of the lawyer.
The Investigative Committee has opened a criminal case against Russian investors who manipulated prices of foreign shares by deceiving a trading robot belonging to the financial company W-Empirical Holding Corp. (registered in the USA). The case was opened under Part 4 of Article 159 of the Criminal Code (fraud russia whatsapp resourcecommitted by an organized group of persons). According to the investigation, the actions of the accused resulted in losses of more than 150 million rubles for W-Empirical Holding. RBC has reviewed a copy of the indictment in this case; its authenticity was confirmed by two sources familiar with the trial materials.
W-Empirical Holding acted as a market maker under an agreement with the broker Freedom Finance (in October 2022, it left Russia, the business was transferred to a new owner, the company was renamed Tsifra Broker). A market maker is a special trading participant that maintains the trading of financial instruments in an active state: its activity is necessary so that an investor wishing to buy or sell securities can always find a counterparty for a market transaction, even in the absence of counter offers at a certain point in time.
The case materials state that in 2022, at least two people - V.I. Zinchenko and S.P. Kuleshov - using accounts in Freedom Finance and another unidentified financial organization, carried out fictitious transactions with low-liquidity American securities, first unreasonably reducing their price, and then increasing it.
The market maker's algorithm worked on artificially set prices for securities and first sold the securities to the accused at a lower price, and then bought them back from them at a higher price. The spread (difference) between cheaper and more expensive transactions from February to May 2022 provided the participants in the scheme with an illegal income of 154.6 million rubles. As another source familiar with the case told RBC, Kuleshov and Zinchenko are not the only ones accused of such manipulations.
How the scheme was prepared
The case materials against Kuleshov state that in early February 2022, Zinchenko received information about the operating algorithm of the market maker, W-Empirical Holding Corp.
Zinchenko approached Kuleshov and asked him to open a brokerage account and a depository account with Freedom Finance, as well as a bank account. Funds in the amount of 6 million rubles were deposited into the brokerage account so that Kuleshov could obtain the status of a qualified investor (without which it is impossible to make transactions with low-liquidity foreign securities). He then passed on his account details to Zinchenko, for which the latter promised to pay him 30 thousand rubles monthly. Subsequently, Kuleshov withdrew money from the accounts and transferred it to Zinchenko through intermediaries, and also met with representatives of Freedom Finance - the case materials indicate that Kuleshov tried to distance himself from such a meeting, but still went to it at the insistence of the lawyer.