https://www.nytimes.com/2002/12/21/business/soros-is-found-guilty-in-france-on-charges-of-insider-trading.html
Soros Is Found Guilty in France On Charges of Insider Trading
After a 14-year investigation, a French court today convicted the American financier George Soros of insider trading and fined him 2.2 million euros ($2.3 million), the amount prosecutors said he had profited from the trading. Mr. Soros, who was not present in the courtroom, called the verdict unfounded and said he would appeal.
Prosecutors accused Mr. Soros of buying stakes in four formerly state-owned companies in France, including one of the country's leading banks, Société Générale, for his Quantum Endowment Fund in 1988 based on confidential information. The stakes were worth a total of about $50 million at the time.
Two other defendants in the case – Jean-Charles Naouri, 53, a former senior official in the French finance ministry, and Samir Traboulsi, 64, a French citizen of Lebanese origin – were acquitted. At a hearing a month ago, prosecutors recommended fines for all three men, and suggested the $2.3 million figure for Mr. Soros as a minimum penalty.
The roots of the case date back to 1987, when the center-right government of the time privatized Société Générale, a major French banking company. When the Socialist Party retook power in an election the next year, the new government sought to regain control of the bank. Seeing an opportunity to profit while helping their political allies, a group of investors connected with the French financier Georges Pébereau devised a plan to acquire control of Société Générale, sending its share price soaring.
According to testimony in the trial, an associate of Mr. PĂ©bereau told Mr. Soros by telephone about the planned bid, hoping to enlist his support. He declined to take part.
At no point was I in possession of inside information regarding Société Générale, said Mr. Soros, who was in New York today, in a statement. He called the charges against him without merit and said he would appeal the verdict to the highest level necessary.
Mr. Soros had never before been convicted of financial misdeeds. In 1979, he signed a consent decree with the Securities and Exchange Commission in a civil proceeding relating to his trading in the stock of an American computer manufacturer that was about to issue fresh shares. Commission officials contended that Mr. Soros had sold shares to push down the price of the new shares.
Mr. Soros acknowledged no wrongdoing, but agreed not to engage in similar practices in the future. Unlike American law, French law does not provide for civil enforcement actions in insider trading cases; they may be pursued here only as criminal matters.
In an appearance before the court in November, Mr. Soros said, I have been in business all my life, and I think I know what is insider trading, and what it isn't.
The unsuccessful bid for Société Générale by Mr. Pébereau, whose brother Michel Pébereau is chairman of BNP Paribas, formed part of a larger political intrigue involving François Mitterrand, who sought after winning re-election as president in 1988 to bring several large French companies under the sway of investors supporting his Socialist Party.
An early investigation into the events by the French stock market oversight agency, the Commission des Opérations de Bourse, made little mention of Mr. Soros. Not until after 1992 did prosecutors question him about his role in the affair.
None of the central participants in Mr. Pébereau's plan to take over Société Générale, including the former chairman of the L'Oreal cosmetics group, François Dalle, and the French founder of the Perrier water group, Gustave Leven, were brought to trial.