German prosecutors said this morning their investigation of Deutsche Boerse CEO Carsten Kengeter relates to talks held between the company’s management and the London Stock Exchange shortly before they announced merger talks.
Deutsch Boerse’s supervisory board chairman Joachim Faber has described the accusations as “groundless”, according to Reuters.
It’s not often that CEOs of large public companies get caught up in insider trading cases, but almost unheard of for exchange CEOs, who run outfits that usually have large corporate governance arms tasked with stomping the practice out.
Last year, the former CEO of ASX, which runs Australia’s main stock exchange, stood down in the face of an investigation by local authorities, though that was over an alleged payment to the Cambodian prime minister as part of a bribery probe.
Frankfurt-based Deutsche Boerse had already confirmed late Wednesday that the Frankfurt public prosecutor had opened an investigation into Kengeter’s purchase in December, 2015 of company shares as part of a remuneration program. The companies started talking about a €23 billion ($26 billion) merger in January, 2016 before going public in February via an announcement that lifted both companies’ shares prices.
The share purchases were part of a recently-enacted incentive scheme approved by the board. “Such [a] programme provides for an investment of the executive board members in shares of Deutsche Boerse,” the company said in a statement, adding that it and the CEO would fully cooperate with the public prosecutor.
The Frankfurt prosecutor’s office said in a statement this morning that it had searched offices at Deutche Boerse’s headquarters on Wednesday in connection with a €4.5 million purchase of shares by Kengeter. The search was conducted to review the course of talks up to February 23, 2016, when the merger negotiations were made public, it said.