Deutsche Börse has moved for a resolution regarding the insider trading allegations relating to Carsten Kengeter’s role in share purchases extending back to 2015. Mr. Kengeter found himself facing pressure from German regulators after purchasing $4.85 million in Deutsche Börse shares at the onset of merger talks with the London Stock Exchange (LSE).
The decision follows last month’s development, which grew to include not only Mr. Kengeter but all of the bourse’s leading management. While Deutsche Börse was hit with a collective $12.5 million (€10.5 million) fine in August, Mr. Kengeter was not cleared of wrongdoing and the investigation was still ongoing.
Amidst the growing scale of the probe however, Deutsche Börse moved for a closure of the investigation this week, deciding to reach a resolution with Frankfurt public prosecutors. Consequently, the group is accepting the fines related to the accusations of insider trading in December 2015, and to an alleged failure to publish an internal announcement back in January 2016.
This action will see Deutsche Börse pay the previously announced fines amounting to €10.5 million ($12.5 million). Deutsche Börse’s executive and supervisory boards feel that no violation was committed relating to capital markets rules.
Coming to terms
Mr. Kengeter has towed the same line ever since the investigation was first brought to light, firmly shooting down all allegations. Over the past few months he has on multiple occasions reiterated that any insider trading 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.
However, the timing of the moves, in close proximity to the merger plans which were revealed shortly after in early 2016, proved to be a point of contention for prosecutors – shares managed to soar during this period with investors bullish on a successful merger. That deal ultimately failed earlier this year.
The group’s decision to accept the fines represents the first step in moving past the ordeal not just for Mr. Kengeter but for the rest of Deutsche Börse’s management too. The group will now look to re-calibrate and focus on its future business, having been plagued by investigations for years.