French Appeals Court Finds Soros Guilty Of Insider Trading

by Ulrika Lomas, for LawAndTax-News.com, Brussels

01 April 2005

Investment guru and philanthropist, George Soros was last week found guilty by the Appeals Court in Paris of insider trading activity, and ordered to repay EUR2.2 million in illegal profits.

The disputed transaction involved a share purchase made by Soros' Quantum Fund following an approach in September 1988 by financier Georges Pebereau, who sought to create a partnership of investors and build a stake in the bank.

Although Soros declined to take part in the bid, his Quantum Fund later that month purchased $50 million in SG shares and in three other recently privatised French organisations.

Pebereau managed to build up a 9% stake in the bank, but the takeover bid collapsed as a result of soaring SG share prices and the refusal of the bank's board to cooperate. The Quantum Fund, according to reports, sold its stake in November of that year.

The prosecution in an earlier case argued that the investment fund should not have purchased the shares having rejected Mr Pebereau's approach, a viewpoint supported by Judge Anne Marie Foncelle in 2002.

However, Mr Soros' legal team reportedly argued at the Court of Appeals that the information that the financier was seeking other investors was well known in Paris financial circles, and the fact that Societe Generale was a takeover target was the subject of several media reports at the time.

Speaking on behalf of the billionaire investor on Thursday, spokesman Michael Vachon announced that:

"Mr Soros maintains his innocence. He will appeal this case. He is confident that he will ultimately be vindicated in this matter and that justice will be served."

According to observers, Soros can either appeal the verdict before the French Supreme Court, the Court de Cassation, or before the European Court of Justice.

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