New York Times wrote that Estonian prosecutors charged Dmitri Vassiljev, a former analyst at SEB Enskilda, with using inside information to trade shares and options of the Baltic telecommunications companiess Eesti Telekom and TEO.
Mr. Vassiljev used information on TeliaSonera’s offer to buy out minority shareholders in the two companies to which he had access to before it was made public, the Tallinn-based state prosecutor’s office and Financial Supervisory Authority said Thursday in separate statements. Eesti Telekom rose 23 percent and TEO jumped 30 percent after the offer was announced
Comments from CSA Partners:
This case highlights the importance of proper systems and controls that investment banks and advisors should have in place in order safeguard inside information from their customers.
- every member of the staff should be exposed to the information only on a need to know basis;
- flow of inside information should be rigorously controlled and list of insiders, with exact date and time when information was received, maintained;
- each employee who has obtained the access to the information, should be alerted about the fact that the information received, is inside information;
- adequate personal account dealing controls (e.g. list of restricted instruments) should prohibit members of the staff from making transactions (directly or via related persons) with securities issued by the customer.