The Bank of Russia found the insider

The Russian regulator creates a precedent of a global scale.
The Central Bank for the first time established the fact of using insider information when using the strategy of autopsy. According to the regulator, the author of several strategies on the online site Elvis Marlamov could earn over 8 million rubles on insider. However, the trader himself denies the charges, and Finam, which owns the Internet service, believes that the Central Bank has no grounds for claiming the company.

The Bank of Russia has established the facts of the systematic use by the client of Finam JSC Elvis Marlamov of the insider information of the professional participant to carry out transactions with 29 liquid securities at the trades of the Moscow stock exchange between June 2016 and February 2018, the regulator's website reported. Mr. Marlamov was the author of six trading strategies used by the clients of the largest retail broker "Finam" within the framework of the service "Autosearch" on the site of Auto-exploration - services that allow ordinary investors-participants of the system to automatically copy the transactions of the leading account. Total transactions manager is followed by about 2 thousand people, and the total number of their accounts reaches 4 thousand units. As the director of the department for countering unscrupulous practices of the Bank of Russia, Valery Lyakh, said, this is the first such case in world practice.

According to the regulator, "using information on price parameters in orders of subscribers and the direction of filing applications (purchase / sale) affecting the market price of securities, and assessing the market reaction in connection with the receipt of applications", Mr. Marlamov made transactions on his isolated accounts with the same securities. The Central Bank considered that during the analyzed period the trader received an unjustified income of more than 8 million rubles, which, according to the Criminal Code of the Russian Federation, is recognized as an income in a particularly large amount. According to the regulator, the actions of the manager should be regarded as "unfair behavior towards subscribers of trading strategies that have decided to join the service, counting on compliance with the provision of services with legislative and ethical standards." In fact, it is a kind of front-line - unfair practice, in which the author of the strategy puts his bid for the purchase of securities before a major order of his client (potentially leading to the market movement), buys paper first for himself and only then for the client, already at a higher price.

As Elvis Marlamov told Kommersant, he does not understand the reasons for the Central Bank's claims. "I had no intention, I was not going to deceive anyone and make money on this," the trader said. Surprised and in the "Finam", where Mr. Marlamov worked until 2012. Now he is not a broker's employee, being in the status of his external counterparty. Place your strategy on the service can any manager who has an active trading account in Finam. "We are monitoring all accounts of the authors of the strategies of autopsy. Accounts, which could be poured profit, Marlamov in the "Finam" was not, "- said the company's president Vladislav Kochetkov. According to him, the strategy of this manager in the moment is concentrated to 1 billion rubles, with most of these strategies are generally profitable for customers.

"Finam" did not receive instructions from the regulator to stop operations on Marlamov's accounts, Mr. Kochetkov points out.

According to him, the situation is not completely clear, the company will consult with the Central Bank. It is likely that Mr. Marlamov's strategy will be removed from the site. "Perhaps some of the clients will disconnect from these strategies. In any case, their papers will not disappear, they will simply stop the transactions automatically, "he concluded.

The problem of potential dangers for the market and clients of the autocontrol strategies has been discussed for a long time. However, so far the regulator and his supervisors can not come to a common opinion on this issue. So, for example, the variant of change of parameters of the transactions passing in frameworks of such strategy was offered. "The leader combines his application for purchase with the application of those who follow this strategy. The price for the leader and his followers is averaged, "- said earlier the first deputy chairman of the Central Bank Sergei Shvetsov. In addition, the issue of establishing requirements for brokers, who attract authors of avtovision strategies, was discussed in the framework of the law on financial advisers. An alternative proposal is to classify the strategies of autocrossing as a kind of trust management with all the ensuing consequences - risk profiling, disclosure of information on the client's portfolio, fiduciary obligations in case of loss of funds by the client, etc. According to Mr. Lyakh, the Central Bank intends to meet authors of other avtovision and market participants and give advice on how to avoid situations in which the service is used for the purposes of criminal enrichment.