Thursday, November 30, 2023

Russian Stock Exchange Hit by U.S. Sanctions Files for Bankruptcy 

A petition for bankruptcy purportedly filed by the St Petersburg Stock (SPB) Exchange has been rejected, according to reports which come less than a month after the U.S. imposed sanctions on it.

However, media in Russia have reported that the request for insolvency by the country's second-largest bourse—behind the Moscow Exchange—may have been a fraudulent ploy by attackers to manipulate the market and that an investigation has been launched.

Rumors of an impending insolvency prompted a slump in the stock exchange's shares by more than a third (34.9 percent) before partially recovering as speculation mounts over whether the request was genuine, according to financial website

Newsweek has contacted Russia's Central Bank for comment.

On November 2, the U.S. Treasury's Office of Foreign Assets Control added the SPB Exchange, which gives investors access to the international stock markets, to its sanctions list before suspending its trading in American securities.

The U.S. measures also targeted seven Russia-based banks and a banking executive to further punish the country over its full-scale invasion of Ukraine and isolate it from the world's financial system.

On Monday, the brokerage denied media reports that filings with Moscow's Arbitration Court from November 24 showed it had applied for bankruptcy. The name of the applicant and the amount of the claim were not indicated on the application. The exchange said in a statement it "has a stable financial position and there are no signs of bankruptcy," according to the Moscow Court of Arbitration.

But the Moscow court said it had received an application from some source, according to media reports.

This was rejected because it violated the legal procedure by not being published on Russia's financial registry, Fedresurs, and did not contain the required evidence needed "to verify its validity," the court said. The ruling said that rejecting a petition does not prevent a request for bankruptcy from being filed again.

SPB Exchange issued a statement that it will "contact law enforcement agencies and initiate an investigation into a case of forgery of documents and unlawful filing of a bankruptcy petition by attackers."

The Bank of Russia said it would investigate whether there had been violations of legal requirements on insider trading and market manipulation and would examine the actions of investors with shares of the trading platform, the newspaper Vedemosti reported.

Meanwhile, the bank's head of consumer rights protection, Mikhail Mamuta, called for an investigation because there had been an "obvious manipulation" of the price of the stock exchange's shares.

"This is not an abuse of rights, this is close to a crime and it seems to me that law enforcement should figure out what happened," he said, according to business outlet RBC.

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