German prosecutors said on Thursday they were investigating how far merger talks between Deutsche Boerse and the London Stock Exchange had advanced by the time Boerse’s chief executive bought 4.5 million euros ($4.9 million) worth of shares in his company.
Carsten Kengeter bought the stock in December 2015 as part of a management remuneration program, just over two months before the merger talks were publicly announced.
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.
“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 on Thursday.
There was no immediate comment from Kengeter.
Deutsche Boerse’s supervisory board Chairman Joachim Faber backed Kengeter late on Wednesday, saying the prosecutor’s suspicion was “groundless.”
The London Stock Exchange it welcomed the chairman’s support for Kengeter and said it looked forward to completing the planned merger between the two exchange operators. .
Prosecutors said they had searched offices at Deutsche Boerse’s headquarters in Eschborn near Frankfurt as well as Kengeter’s Frankfurt home on Wednesday.
It said it aimed to clear up the course of talks between Deutsche Boerse and LSE up to Feb. 23, 2016, when the two companies confirmed they were in negotiations for a merger.