The State will back victims of stock market fraud

Russian Parliament adopted on Wednesday the law making the violation of stock-holders’ rights and stock market manipulation a criminal offence.

These actions, strictly speaking, have already been illegal. The novelty is that now the State will be dealing with the investigation of the breaches of law and prosecution of offenders. Those who suffered from the crime can still claim damages but now they will be able to pass the burden of proof that the offence took place to the law enforcement agencies.

Violation of the registration of the stocks will now be punishable by up to 6 years in prison and a 3-year prohibition on the profession. Breaches in the conduct of the shareholders meetings can lead to 2 years behind bars.

Criminalisation of the offences demonstrates the government’s concern about illegal takeovers and the fact that raids are almost always conducted with the help of corrupted officials. It is the common sense, therefore, that the investigation and prosecution of these practices should be backed by the State.

Stock market manipulation will now be punishable by 7 years in jail. The law on criminal liability for inside trading is being considered by Parliament.

 

 

October 15, 2009

 

 

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