January 2, 2019 / 5:30 PM / in 4 months

Prosecutor drops insider trading case against former Deutsche Boerse CEO

FILE PHOTO: Carsten Kengeter, CEO of Deutsche Boerse attends the initial public offering of Scale at the Frankfurt stock exchange in Frankfurt, Germany March 1, 2017. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - The Frankfurt prosecutor’s office has dropped an insider trading case against former Deutsche Boerse Chief Executive Carsten Kengeter in exchange for payments of almost 5 million euros ($5.68 million).

Prosecutors investigated Kengeter after he purchased Deutsche Boerse shares worth 4.5 million euros in December 2015 as part of a management remuneration plan awarded only two months before the German company announced it was in talks to combine with London Stock Exchange.

Frankfurt prosecutors had sought to establish whether the share purchase constituted share trading by someone privy to insider information.

Deutsche Boerse has denied wrongdoing and a spokesman for Kengeter, who has not been charged with any crime, reiterated that the former CEO denies wrongdoing.

Kengeter resigned from his post in October 2017, with the company saying the decision was to allow management to focus on business rather the investigation.

The Frankfurt prosecutor’s office on Wednesday said the case had been dropped in exchange for a 250,000 euro charitable donation. A further 4.5 million euro payment equivalent to the value of Kengeter’s stock purchase was confiscated by a Frankfurt court.

Last month Deutsche Boerse said it would pay a 10.5 million euro fine to resolve the case and that investigation of Kengeter had been dropped.

The exchange operator said the allegations were unfounded but it had concluded that resolution of the caser on this basis was in the best interest of the company.

($1 = 0.8803 euros)

Reporting by Hans Seidenstuecker; Writing by Edward Taylor; Editing by Maria Sheahan and David Goodman

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