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Soros Appeals Insider Trading Verdict
Thu Feb 10, 6:49 PM ET
By LAURENCE FROST, Associated Press Writer
PARIS - Billionaire investor George Soros asked the Paris appeals court to
overturn his conviction for insider trading on Thursday, telling a panel of
three judges: "My reputation is at stake." The Hungarian-born financier was
fined 2.2 million euros ($2.8 million at today's rates) in December 2002 —
the amount he was accused of making from buying and selling shares of French
bank Societe Generale with insider knowledge 17 years ago.
Questioned by judge Jean-Baptiste Avel, Soros acknowledged hearing from
Paris financier Georges Pebereau in September 1988 about his plans for a
takeover of the French bank, but denied this amounted to confidential or
insider knowledge.
"He (Pebereau) was discussing it with many other people," Soros told the
court. "I didn't consider it to be in any way privileged information."
Soros declined to invest in Marceau Investissement, the holding through
which Pebereau was accumulating Societe Generale stock, but began buying
significant numbers of the shares independently just days later, the court
heard.
The billionaire conceded that Pebereau's investment fund "may have
influenced" Societe Generale's surging share price.
But his defense attorneys said the purchases were part of a broader,
documented strategy of buying up shares in recently privatized French
companies.
They argued it had been common knowledge among investors that the French
government wanted leadership changes at such companies — which could
dramatically improve their profitability.
Soros' Societe Generale share purchases represented just 0.3 percent of his
total investments over the period, said attorney Bernard du Granrut, summing
up for the defense.
"If it really was insider information, he didn't make very good use of it,"
he said.
Du Granrut also castigated the prosecution for the "unreasonable delay"
between the start of the investigation in 1993 and his client's indictment
in 2000.
Soros, who emigrated to the United States in 1956 and set up Soros Fund
Management in 1973, now heads a philanthropic network that has funneled
massive sums into education, public health, science and non-governmental
groups, mostly in the former communist bloc.
The 74-year-old investment wizard — whose Quantum Fund is now worth $8.3
billion — indicated Thursday that he was more concerned about clearing his
name than avoiding the fine, calling the original guilty verdict a "gift to
my enemies."
Soros has been criticized in some quarters for speculating on, and arguably
encouraging, the collapse of Asian currencies in the late 1990s.
More recently he drew the wrath of U.S. Republicans by pumping about $27
million into campaigns to unseat President George W. Bush in last year's
election. Right-wing commentators widely alluded to his French insider
trading conviction.
Prosecutor Denys Millet urged presiding judge Odile Faivre and her two
colleagues to uphold the 2002 conviction and fine.
Having received information that was both confidential and obviously
price-sensitive, Millet said, Soros failed in his duty to refrain from
buying the bank's stock — regardless of the deal's relatively modest scope
and the fact that he also bought other shares.
The judges will return their verdict on March 24.
If the court upholds his conviction, Soros could file a further appeal to
the Paris Cour de Cassation or the European Court of Human Rights in
Strasbourg — on the grounds that the French judicial system breached his
right to "trial within a reasonable time."
Serbian News Network - SNN
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