The Times (Great Britain): "Vladimir Putin threatens jail in crackdown on insider trading"
Tony Halpin
Vladimir Putin, the Prime Minister of Russia, ordered a crackdown on insider trading in the country's ailing stock markets yesterday and said that the country should create its own debt ratings agencies.
Mr Putin said that traders guilty of insider dealing would face prison terms of up to seven years under proposed new legislation.
He told Cabinet ministers: "Punishment for these wrongdoings should become real and unavoidable."
Mr Putin also said that ratings agencies should seek accreditation from the Finance Ministry in future, only a week after Russia's long-term local and foreign currency rating was downgraded by Fitch Ratings.
He said that international agencies had failed to understand Russia's markets.
"We are interested in the appearance of powerful domestic rating agencies, which will have a fuller knowledge of Russian market peculiarities and will offer accessible and quality terms not only to large companies but also to medium businesses," Mr Putin said.
Russian companies were totally dependent for their debt ratings on foreign agencies, which were "focused on the economies, customs and business practices of other states".
However, he said that accreditation would be voluntary. Recognition of an agency would imply the Finance Ministry's seal of approval for "the correctness of its evaluations and conclusions".
Fitch's decision to downgrade Russia from BBB+ to BBB came amid concerns over the effect on its economy of falling oil and gas prices, and a draining of foreign capital. Moody's and Standard & Poor's took similar action in December.
Vladimir Milovidov, head of the Federal Financial Markets Service, said that Russia's media could also face prosecution for publishing information "that could impact market trends".
The service would investigate if evidence emerged of corrupt dealings between editors and company directors.
Insider trading in Russia is widespread but offenders are rarely caught and face only fines under existing legislation.
