Deutsche Boerse CEO says disputed share deals were "moral duty"

* Comments come as insider-trading probe drags on

* Kengeter on Deutsche Boerse (IOB: 0H3T.IL - news) future: "I am standing here"

* Defends share purchase as a "moral duty" (Updates with further comments)

FRANKFURT, Sept 7 (Reuters) - Deutsche Boerse Chief Executive Officer Carsten Kengeter on Thursday said the stock purchases at the centre of insider trading allegations against him were a "moral duty".

Kengeter is under investigation by Frankfurt prosecutors over the allegations, which have cast a shadow over the German exchange operator's efforts to recover from a failed merger with the London Stock Exchange (Other OTC: LDNXF - news) .

"I believe when there is an offer from the supervisory board, then there is a moral duty to accept it," Kengeter said of the share-based compensation package he received.

"The message that would be sent if you did not do it, is not good," Kengeter, who has always denied any wrongdoing, told a financial conference in Frankfurt.

Kengeter has said the share purchases were part of an official Deutsche Boerse compensation plan and told shareholders in May: "Insider trading goes against everything I stand for."

Earlier this year, as Deutsche Boerse discussed a merger with LSE, police and prosecutors searched Kengeter's office and home amid concerns over Deutsche Boerse share purchases which were made months before the announcement of deal talks.

The LSE merger was blocked, but the allegations of insider trading continue. Kengeter and Deutsche Boerse are also under investigation by the German finance watchdog BaFin and the government of Hesse, the state that regulates Deutsche Boerse.

Earlier this year, Deutsche Boerse said the Frankfurt Prosecutor's office had offered to settle the insider trading case in exchange for a fine of 10.5 million euros ($13 million).

The fines would be for failing to notify the public promptly about the merger talks with the LSE and over the design of its executive share-buying scheme that allowed Kengeter to buy shares in the first place.

Deutsche Boerse has denied any wrongdoing and is still deliberating how to respond to the demand by prosecutors.

Kengeter and Deutsche Boerse have said that he was authorised to buy the shares at a fixed time, between Dec (Shanghai: 600875.SS - news) . 1 and Dec. 21, 2015, as part of the compensation programme - some two months before the merger talks were made official.

Kengeter also received additional virtual shares, whose value depended on the long-term development of the company's value and is required to hold the stake until the end of 2019.

When asked at the conference about his future at Deutsche Boerse, Kengeter said:

"I am standing here and not a hologram." ($1 = 0.8349 euros) (Reporting by Tom Sims, Hans Seidenstuecker, and Andreas Framke; Editing by Edward Taylor and Alexander Smith)