Deutsche Boerse: Court Refused to Stop Proceedings Against CEO

By Max Bernhard and Nathan Allen Features Dow Jones Newswires

Deutsche Boerse AG (DB1.XE) said late Monday that a Frankfurt court refused to drop investigation proceedings related to alleged insider trading against its chief executive, Carsten Kengeter.

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"In light of the significance of the proceedings the court considers it appropriate to continue the investigation proceedings at this time," Deutsche Boerse said.

Investigations into Mr. Kengeter's alleged insider trading focus on whether merger talks with London Stock Exchange Group (LSE.LN), which later failed, were already in progress when Mr. Kengeter bought shares in Deutsche Boerse in late 2015.

According to an official disclosure notice, Mr. Kengeter bought 60,000 Deutsche Boerse shares worth 4.5 million euros ($5.3 million) on Dec. 14, 2015, a little more than two months before talks with LSE were announced publicly. That announcement resulted in a sharp rise in Deutsche Boerse shares.

Last month Deutsche Boerse had agreed with prosecutors to pay EUR10.5 million in fines in order to terminate the investigations.

In part, the fine was connected to allegations that the company failed to publish an ad-hoc note about the merger talks in January 2016. Deutsche Boerse accepted the fine but said it continues to believe the allegations are unfounded.

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The court has now returned the case to the public prosecutor, who must decide on further steps. Deutsche Boerse said the outcome of the investigation remains to be seen, and could result in the court dropping the proceedings or issuing an indictment.

Plans to merge Deutsche Boerse with LSE were announced in February 2016 but the EUR28 billion deal collapsed in March 2017 when the European Union blocked it, fearing it would effectively create a monopoly. LSE refused to sell its majority-stake in Italian trading platform MTS SpA (MTS-YY) to address EU concerns.

Write to Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard

(END) Dow Jones Newswires

October 24, 2017 02:48 ET (06:48 GMT)