Russia's central bank alleged that a banker for Deutsche Bank's Russian operation had manipulated markets by conducting 300 billion roubles ($6.7 million) of trades with relatives over 2 1/2 years. 

The central bank said the trades, made between January 2013 and July 2015, generated a profit of 255 million roubles for former Deutsche Bank equity trader Yuri Khilov and three relatives.

"The Bank of Russia has sent the corresponding materials from the probe to law enforcement agencies," the central bank said. Valeriy Lyakh, the head of the central bank's market violations monitoring department, told reporters, that a one-year statute of limitations prevents the central bank from fining Deutsche Bank for market manipulation.

The Frankfurt-based lender was already grappling with a range of regulatory woes including US probes into mirror trading from its Russian office. The Khilov case is unrelated to that scandal, Lyakh said.

Lyakh said Khilov and relatives could be responsible for as much as 500 billion roubles of market manipulation but that the central bank had confined its investigation to 2013-2015.

A Deutsche spokesman said the bank had conducted an internal investigation into the activities of Khilov and had provided its findings to the market regulator. Deutsche will cooperate closely with authorities, the spokesman said.

Khilov did not respond to a message seeking comment.

The Russian central bank's investigation was conducted with help from Germany's Federal Financial Supervisory Authority.

It is separate from an investigation into so-called "mirror trades" involving Deutsche's Moscow office which could have allowed clients to move money from one country to another without alerting authorities in 2014.

The Russian central bank's findings are an embarrassment for Germany's flagship lender, which recently cut back its investment banking activities in Russia.

Deutsche will probably escape a fine from the Russian regulator over the trades involving Khilov because of the amount of time that has passed since the trades were made. But law enforcement officials are yet to make their position clear.

The German bank is facing a large penalty in the United States for allegedly misleading investors when selling mortgage-backed securities.

The Russian central bank alleges that Khilov and his relatives manipulated trading in eight securities on the Moscow Exchange, including the ordinary shares of Russia's Gazprom and Nornickel as well as the preferred and ordinary shares of Sberbank.

Khilov made trades which were favourable to his relatives and in doing so manipulated markets, the central bank said.

with Bloomberg