Deutsche Börse CEO Carsten Kengeter Resigns Amid Insider-Trading Probes

Kengeter bought shares worth €4.8 million just over two months before the merger talks with LSE were publicly announced.

Deutsche Börse’s CEO Carsten Kengeter is stepping down amid ongoing investigation over possible insider trading that took advantage of undisclosed information about merger plans with the London Stock Exchange, the company said Thursday.

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Carsten Kengeter told Deutsche Börse’s supervisory board that he’d be gone by the end of the year in order to allow the company to “focus its energy back onto clients, business and growth and to avoid further burdens caused by the ongoing investigation.”

Thursday’s announcement did not include any indication as to whether these insider trading allegations hastened Kengeter’s departure.

The firm’s supervisory board didn’t announce any successors but Deputy CEO Andreas Preuss and CFO Gregor Pottmeyer are the two names considered to possibly take the helm of the German exchange operator until a permanent replacement is found.

The investigation against Carsten Kengeter involves the buying of stocks of the Frankfurt exchange operator in December 2015 as part of Deutsche Börse’s executive pay program. Specifically, the probe centres on whether secret merger negotiations with the London Stock Exchange were under way when Kengeter bought shares in his company.

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The CEO bought shares worth more than €4.0 million just over two months before the official merger talks with LSE were publicly announced, a practice that could be treated as insider trading under German law.

Deutsche Börse has denied any wrongdoing in the purchase of the shares. Mr. Kengeter also firmly shot down all allegations, saying that any insider charges against him would prove totally unfounded and that he had no role in dictating the timing of his share purchases with the announced merger plans with the LSE.

Deutsche Börse was hit with a collective $12.5 million (€10.5 million) fine in August, but Mr. Kengeter was not cleared of wrongdoing and the investigation was still ongoing.

Commenting on his resignation, Carsten Kengeter said: “This decision was not easy for me since I feel very closely connected to Deutsche Börse and I still have many plans for the company. In the light of the public accusations and allegations, I am taking this step to protect Deutsche Börse in particular. I will thoroughly cooperate with the authorities until the end of the investigation. With this decision, I am paving the way for a new beginning for Deutsche Börse. Until the end of the year, I will contribute to an orderly transition. I would like to thank the Supervisory Board and the employees for the trust they have expressed in me.”

Joachim Faber, chairman of the Supervisory Board of Deutsche Börse, added: “I very much regret Carsten Kengeter’s decision, but I also have great respect for it. Since taking office, Carsten Kengeter has achieved a lot for Deutsche Börse. This is why I would like to thank him sincerely for his contributions and wish him all the best for his future. The Supervisory Board today acknowledged and broadly discussed Carsten Kengeter’s decision. We understand that the decision he took in the light of the difficult situation was in the best interest of the company. Nevertheless, the Supervisory Board regrets losing in Carsten Kengeter a CEO who laid the foundation for a successful future of Deutsche Börse in a significant way. Deutsche Börse is much better positioned now than it was prior to the beginning of his tenure. We very much appreciate that Carsten Kengeter remains committed to leading the company through its transition period.”

 

 

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