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A Russian stock exchange descended into chaos this week after fraudsters declared it had filed for bankruptcy

stock market shadow
REUTERS/Issei Kato
  • The Saint Petersburg stock exchange broke into chaos this week after a filing said the exchange was bankrupt.

  • The filing was submitted by fraudsters, the exchange said in a statement.

  • The turmoil briefly sent some shares plunging to their lowest-ever price.

One of Russia's main stock exchanges descended into chaos this week after a false bankruptcy report sent investors fleeing and pushed shares briefly to record lows.

Court filings dated November 24 show that the Saint Petersburg Stock Exchange, Russia's second largest stock trading platform, filed for bankruptcy last week, Reuters reported.

News of bankruptcy filings caused investors to flee the exchange, with Moscow-listed shares on the SPB Exchange plunging 30% on Monday to their lowest-ever level.

But the filing was a fake submitted by fraudsters, the exchange said on Monday. The Moscow Arbitration Court has also rejected the filings, the state-owned Russian news agency RIA reported.

"SPB Exchange has not filed documents for bankruptcy," SPB's media team told Reuters this week. "SPB Exchange has a stable financial position and there are no signs of bankruptcy."

Shares on the SPB Exchange recovered slightly after the announcement, ending Monday just 9.5% lower.

The tumult finishes off a rocky month for the SPB exchange, which was hit by US sanctions late in November. New restrictions have the exchange unable to settle around two-thirds of clients' trades held in foreign currency. Trading on the exchange was briefly halted before it rolled out a plan to distribute a third of funds back to clients, but only in rubles.

Foreign investors in Russia are stuck in a state of limbo. The nation has halted flows of foreign assets, meaning those who invested in Russian stocks prior to the invasion of Ukraine haven't been able to cash out. The move is intended to prop up Russia's stock market, two Yale researchers previously told Business Insider, adding that Russia's stock market performance this year has been a facade created by restrictions imposed by Moscow.

Read the original article on Business Insider

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