Soros Found Guilty of Insider Trading
Fri Dec 20,10:38 AM ET
news.yahoo.com
By Joelle Diderich
PARIS (Reuters) - A Paris court on Friday found U.S. billionaire George Soros guilty of using inside information to make money on shares in bank Societe Generale, fining him 2.2 million euros.
Hungarian-born Soros, 72, was convicted of using insider information of a botched 1988 corporate raid on Societe Generale to make $2 million on the company's stock. The financier turned philanthropist had denied the allegations.
Soros said in a statement from New York he was "astounded and dismayed" by the court's ruling.
"I will appeal the decision to the highest level necessary," he said. "The charges against me are unfounded and without merit."
Soros's lawyer, Bernard du Granrut, said the judgment did not take into account most of the arguments presented by the defense in court.
Two others on trial, Lebanese businessman Samir Traboulsi and ex-finance ministry official Jean-Charles Naouri, were acquitted by the court.
Soros is best known as "The Man Who Broke the Pound" for betting against sterling in 1992 until London pulled out of the European currency grid that prefigured the euro single currency.
Prosecutors had urged a fine rather than a jail sentence, which is rare but theoretically possible punishment for insider trading under French law.
Lawyers for Soros had argued the case was too old to judge. It took 14 years to come to trial because of delays in securing information from authorities in the Netherlands, Britain, Luxembourg and Switzerland.
The financier told the court last month that the planned raid on Societe Generale was common knowledge in financial markets and he had not obtained any confidential information.
The 1987 privatization of Societe Generale a year before the raid attempt was hailed as a success for the French political right, in government at the time in an uneasy power-sharing arrangement with Socialist President Francois Mitterrand.
Soros said he bought the shares because he thought the raid, aimed at flushing out a hard core of shareholders seen as having links to the right, would free the bank from political influence.
But he said a series of subsequent meetings in Paris convinced him this was unlikely to be the case and he sold the shares, bought as part of a $50 million package that included shares in other banks.
The court heard Soros made an estimated $2 million profit from buying and selling the shares. The raid failed to attract sufficient support from other investors and did not come off.
Soros's Quantum Fund made nearly $1 billion in 1992 by betting against sterling. But it was hammered by huge losses in April 2000 due to an ill-timed move into high-tech stocks.
Since then Soros has set about using his fortune and network of foundations to help tackle what he sees as the failures of a global financial market system which penalizes poor countries. |
