Deutsche Boerse CEO suffers court setback in insider trading case

[October 24, 2017]   BERLIN (Reuters) - Frankfurt's public prosecutor said on Tuesday it would be continuing with its investigation into Deutsche Boerse's chief executive over allegations of insider trading, after a Frankfurt court blocked a settlement deal.

The continuation of the investigation that started early this year could extend beyond March, a spokeswoman for the prosecutor said.

However, Carsten Kengeter's contract expires as chief executive at the end of March 2018 and Deutsche Boerse has said it wouldn't move to renew Kengeter's contract until the insider trading case is settled.

"The investigations are continuing. Everything is possible: A termination of the investigation, an indictment, or also a new deal," the prosecutor's spokeswoman said.

A Deutsche Boerse spokesman said the extent of the investigation and the time it would take were unclear.

Kengeter, who denies any wrongdoing, made share purchases worth 4.5 million euros shortly before formal merger talks between Deutsche Boerse and the London Stock Exchange were announced early in 2016.

Deutsche Boerse and Kengeter have said he was authorized to buy the shares as part of his pay scheme at a fixed time, between Dec. 1 and Dec. 21, 2015.

 Carsten Kengeter talks to the media in Frankfurt, Germany February 24, 2016. REUTERS/Kai Pfaffenbach/File Photo

But Deutsche Boerse said on Monday night a Frankfurt court had refused to ratify a settlement deal between the prosecutors, the exchange and Kengeter, whereby Deutsche Boerse had agreed to pay 10.5 million euros ($12 million) in fines while Kengeter would pay 500,000 euros personally.

Separate investigations by two other regulators are due to start only after the Frankfurt prosecutor's investigation is completed.

"In light of the significance of the proceedings the court (in Frankfurt) considers it appropriate to continue the investigation proceedings at this time," Deutsche Boerse said on Monday.

However, further investigation could lead to a closure of proceedings due to lack of adequate evidence or to an indictment, Deutsche Boerse said.

(Reporting by Andreas Framke and Andreas Cremer; Writing by Tom Sims; Editing by David Evans, Greg Mahlich)

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