NY Times September 15, 2010 Soros to Get a Day in Court Over Insider Trading Case By MATTHEW SALTMARSH
PARIS — Europe’s highest human rights court said Wednesday that it would accept a complaint by the international financier George Soros that his rights were impinged on by French courts in convicting him in an insider trading case dating back more than two decades. Mr. Soros’s legal team says it is now confident that the European Court of Human Rights, based in Strasbourg, will rule on the complaint in coming weeks and, based on precedent, will clear the way for the exoneration of Mr. Soros in France. The case involves the purchase of shares in the French bank Société Générale in 1988, after the bank had been privatized. Mr. Soros was later convicted of buying the shares based on insider information. The European court judged a complaint from Mr. Soros as “receivable,” under Article 7 of the European convention on human rights, which states that no person may be punished for an act that was not a criminal offence at the time that it was committed. If the court rules in favor of Mr. Soros, he will ask France’s top court, the Cour de Cassation, to set aside the conviction based on the decision in Strasbourg, according to Ron Soffer, a lawyer in Paris for Mr. Soros. “We expect that the European court will ultimately rule in the same spirit and that the conviction can then be quashed,” Mr. Soffer said. “As the court pointed out, the stock exchange regulator concluded in 1989 that the statute was not clear enough and it could not conclude that the trade in question was unlawful. This should have ended the matter.” Éric Bosc, a spokesman for the French Foreign Ministry, representing France as plaintiff, did not immediately respond to a request for comment. Paris privatized Société Générale in June 1987, selling shares at 407 French francs, then $63, a share. A year later, after a stock market crash, the shares had fallen to 260 francs. In September 1988, the Parisian financier Georges Pébereau sounded out a number investors, including an adviser to Mr. Soros, about joining him in acquiring shares in the bank. Mr. Soros has said that he never spoke directly to Mr. Pébereau about the investment and did not pursue discussions, judging that Mr. Pébereau was not clear in his objectives. That same month, Mr. Soros’s Quantum Fund spent $50 million to buy 160,000 shares of Société Générale as well as shares in three other companies — Suez, Paribas and the Compagnie Générale d’Électricité — which the French government had privatized and whose stock had also tumbled. His defense team contended that this was part of a broader, documented strategy by Mr. Soros of buying shares in recently privatized French companies. In October 1988, Mr Pébereau’s Marceau Investissement built a 9 percent stake in Société Générale and tried to get the bank to agree to a takeover. The bank refused, and the effort was dropped when Société Générale shares surged in December. Mr. Soros has said that he sold all of his shares by November 1988, after he decided that the companies were becoming too politicized. In 1989, France’s stock market watchdog, then known as the Commission des Opérations de Bourse, told prosecutors that it was not able to conclude that Mr. Soros had committed any offense, as insider trading laws were then too imprecise for a conviction. They have been clarified by successive rule changes. Still, legal proceedings continued and Mr. Soros maintained his innocence. In 2005, the Paris appeals court upheld an initial ruling from 2002 that Mr. Soros had broken insider trading laws by purchasing shares of Société Générale knowing that a group of investors was buying shares in the bank. Because of the years it took to bring the case, prosecutors only sought the minimum fine and did not seek restrictions on Mr. Soros's activities in France. The appeals court also confirmed an earlier order that Mr. Soros should pay back €2.2 million, or $2.9 million at current exchange rates, in gains. The fine was later reduced. In 2006, the Cour de Cassation upheld the conviction but quashed the fine, saying the courts had not distinguished between shares bought in Paris and in London, which fell outside their jurisdiction. Having exhausted his legal avenues in France, Mr. Soros appealed to the European court, arguing that he did not break the rules — having acted independently — that the law was vague and that prosecutors took too long to bring him to trial. His lawyers say that the French government’s response shows a lack of legal rigor and that the legislation in question did not comply with European Union directives on insider trading and show that the evidence was tainted. The Paris verdict is the only legal stain on Mr. Soros’s decades in the investment business, and he has been eager to have the ruling overturned. Over the past decade, he has ceased being actively involved in investing and he now focuses on philanthropic activities. The human rights court was established in 1959. It does not rule on the verdicts of the cases before it, but it establishes whether the civil and political rights of individual or state applications, as set out in the European Convention on Human Rights, have been violated. The court did not accept Mr. Soros’s argument that the case should be heard under Article 6 — the right to a fair and speedy trial — or Article 14, which prohibits discrimination. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
