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Topic Insider monitoring Insider trading

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Article from the Annual Report 2016 of the BaFin

Investigations

Table 21 Insider trading investigations

Insider trading investigations

Insider trading investigations Source: BaFin Insider trading investigations

In 2016, BaFin launched 42 new investigations due to suspected insider trading (previous year: 43; see Table 21 "Insider trading investigations"). In 54 cases, it involved supervisory authorities abroad (previous year: 32), while in turn it dealt with 35 requests from foreign authorities (previous year: 19).

BaFin filed 21 complaints (previous year: 26) against a total of 49 suspects (previous year: 87) with the relevant public prosecutor's office. In 23 cases, it did not find any evidence of insider trading (previous year: 19).

39 investigations, some of which had been initiated in prior years, had not been completed by the end of 2016 (previous year: 41).

Sanctions

One individual was convicted of insider trading in 2016 (see Table 22 "Completed insider trading proceedings"). Cases against 89 individuals were discontinued by the public prosecutors' offices, 14 of them as part of out-of-court settlements. Insider trading and in particular the communication of inside information are difficult to prove. BaFin therefore supports the prosecuting authorities, for example by providing expert reports, delegating experts or accompanying searches.

Table 22 Completed insider trading proceedings

Completed insider trading proceedings

Completed insider trading proceedings Source: BaFin Completed insider trading proceedings

Selected cases

Singulus Technologies AG

On 5 October 2016, a sentence1 for insider trading became final, which the public prosecutor's office in Stuttgart had handed down on 25 May 2016 to the spouse of an employee of a subsidiary of Singulus AG. A fine of 200 daily units of €100 each was imposed, amounting to €20,000 in total. In addition, an amount of €24,380.85 was ordered forfeited as compensation.

On 12 September 2013, Singulus Technologies AG published an ad hoc disclosure, in which it reported that on that day it had entered into a master agreement with Zhejiang Fortune Photovoltaic Co. Ltd. M-Cells, a Chinese manufacturer of solar cells, for the supply of 16 plants for the production of solar cells. In response, the Singulus share price rose by 15%.

On the two days preceding this disclosure, the employee's spouse had bought a total of 210,000 shares of Singulus Technologies AG worth €315,719.15 in three transactions. As early as 13 September 2013, this individual sold all the shares again, generating a gross profit of €24,380.85 in this way.

The public prosecutor's proceedings were prompted by a complaint filed by BaFin in 2014.

Roth & Rau AG

Another case of insider trading proceedings was discontinued by the public prosecutor's office in Stuttgart on 12 September 2016 against payment of €25,000 as part of an out-of-court settlement.2 The decision became final on 26 September 2016.

On 22 April 2011, the Swiss company Meyer Burger Technology AG submitted a takeover bid to the shareholders of the German company Roth & Rau AG. The intended cash offer price of €22 was 11.4% above the last price quoted for Roth & Rau shares, in response to which the share price rose by as much as 12.91%.

Shortly before the takeover was reported, the defendant had bought several tranches of call warrants on the underlying Roth und Rau AG shares with a total volume of €6,340.24. He sold these warrants for €21,120.60 immediately after the publication of the report and thus made a profit of €15,293.50. An unknown individual had previously informed the defendant of the imminent takeover. The public prosecutor's proceedings were prompted by a complaint filed by BaFin in 2013.

Bilfinger SE

Another case was discontinued against payment as part of an out-of-court settlement3, amounting to €20,000 this time, thus ending insider trading proceedings on 30 June 2016 which BaFin had reported to the public prosecutor's office in Frankfurt am Main in 2015. The decision to discontinue the proceedings became final on 7 September 2016.

At 6.27 p.m. on 22 April 2015, Bilfinger SE issued an ad hoc disclosure to report that the first three months of the 2015 financial year had been disappointing for Bilfinger. On the basis of preliminary figures, adjusted EBITA4 amounted to -€8 million (previous year: €47 million). In response, Bilfinger SE's share price decreased by 17.8%.

Also on 22 April 2015, but at 2.58 p.m. already, the CFO of a subgroup of Bilfinger SE bought 57,140 put warrants on the underlying Bilfinger SE shares with a volume of €19,999. She sold them on the following day, generating a profit of €26,855.80.

Footnotes:

  1. 1 Case ref. 155 Js 116120/14.
  2. 2 Case ref. 154 Js 89004/11.
  3. 3 Case ref. 7561 Js 241440/15.
  4. 4 Earnings before interest, taxes and amortisation.

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