German investigators have raided Deutsche Boerse’s chief Carsten Kengeter’s office and private apartment on suspicion that he was involved in insider trading ahead of merger talks with the London Stock Exchange (LSE).
Kengeter purchased €4.5 million shares in his own firm on December 14, 2015. A couple of months later, it emerged that the Deutsche Boerse and the LSE were in merger talks, with the companies agreeing a deal in March, last year.
The Frankfurt prosecutor’s office said it suspected that Kengeter already knew about the possibility of a merger when he bought the shares, which would constitute insider trading under German law.
Since Kengeter’s purchase, shares in Deutsche Boerse are up 11% and under the terms of the deal, if the merger completes, Kengeter will become chief executive of the combined entity.
“The initial suspicion results from talks held by the management of Deutsche Boerse and the London Stock Exchange between July/August and December 2015 that centered on a possible merger of the two companies and the question of where the holding company could be based,” the Frankfurt prosecutor’s office said in a statement.
The prosecutors said it aimed to clear up the course of talks between Deutsche Boerse and LSE up to February 23, 2016, when the two companies confirmed they were in negotiations for a merger.
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