At the request of the court, the National Securities and Stock Market Commission (NSSMC) renewed the license of “TASK-BROKER LLC” to pursue professional activity in the stock market and filed a cassation appeal to the Supreme Court against the decision of the court of appeal.
It should be reminded that on 27.12.18, against “TASK-BROKER LLC”, the Commission recorded violations in the form of deliberate actions that showed signs of manipulation in the stock market, and applied a penalty in the amount of UAH 170 thousand. Due to the non-payment of the fine within three months, on 17.05.19, the Commission suspended the license of “TASK-BROKER LLC”.
“TASK-BROKER LLC” challenged the decision of the Commission in court. On 23.05.19, the District Administrative Court of the City of Kyiv decided to satisfy the company's claim and to declare the Commission unlawful. Subsequently, on 1.08.19, the Sixth Administrative Court of Appeal, after examining the appeal of the Commission, upheld the decision of the court of first instance.
The Commission emphasizes that the court decided to transfer the case to the written proceedings, as a result of which the Commission was deprived of the opportunity to provide explanations regarding the arguments presented by it on all established facts of manipulation in the actions of TASK-BROKER LLC.
Last week, the Commission filed a cassation appeal against the decision of the Court of Appeal, in which it emphasized that the courts of first and second instance had ignored the material circumstances of the case.
Information on the case of “TASK-BROKER LLC”
The Commission established the facts of manipulation of securities of three issuers of PJSC “DTEK Dneproenergo”, PJSC “Yasinovsky Coke Plant”, PJSC “DTEK Zakhidenergo” in the period from 05.01.2016 to 22.09.2016 on the PFTS Stock Exchange. During this period, TASK-BROKER LLC repeatedly concluded transactions with the securities of these issuers in almost all cases with the same counterparty during the trading day. Such actions of the company influenced the information on the trading results on the PFTS Stock Exchange and, accordingly, distorted the data on the trading volumes and the price, and mislead other market participants.
Information on counteraction to stock market manipulation
In total, for the period 2016-2019, the NSSMC initiated 173 cases on the facts of stock market manipulation (later in the law enforcement process they were merged into 74 cases). As a result of the consideration of these cases, the relevant resolutions were drawn up and sanctions were applied to 55 cases (11 professional licenses were revoked, 44 fines were imposed). 19 cases were closed.
During the same period, the courts have considered 31 cases of challenging NSSMC decisions on sanctions for manipulation of the stock market. As a result of these cases, 14 decisions were made in favor of the Commission, 7 decisions were made in favor of stock market entities. There are currently 8 cases pending. 2 cases were closed due to termination of partnership.