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. Last Updated: 07/27/2016

Misdeeds at Bank in Moscow Revealed

BOSTON -- Pioneer Group Inc., an asset management company, has disclosed unauthorized financial transactions at Pioneer Bank in Moscow.

Pioneer Group owns nearly 60 percent of the small Russian bank, which lost $5.9 million during the last quarter and has suspended operations.

Pioneer Group said Wednesday that its unexpectedly high second-quarter loss of $12.1 million resulted from what happened at the bank.

Earlier, it predicted it would lose $10 million.

Pioneer Bank's Russian chairman has resigned, The Boston Globe reported Thursday.

Pioneer Group officials told the newspaper that the pending sale of 35 percent of the bank to an Estonian financial institution had been dropped.

"We've made the decision that we do not want to be in the banking business in Moscow,'' said Pioneer Group chief financial officer William Keogh, 61, who said he will retire in April.

He would not say how much money was deposited in the bank.

The Russian bank had revenues of $15 million in 1996 and $12.3 million in 1997.