Billionaire investor George Soros’s fight against his 2002 insider-trading conviction in France, over the sale of Societe Generale SA shares, may end soon when the European Court of Human Rights rules on his appeal.
The 81-year-old claimed that by convicting him based on rules the stock-market regulator said were too vague to determine whether he acted illegally, France violated his rights under the European Convention on Human Rights.
Soros was convicted of insider trading and ordered to repay 2.2 million euros ($2.9 million) he’d made from the 1988 share purchase after a Paris court found he’d acted with the knowledge that the bank might be a takeover target. French stock market regulators didn’t pursue Soros, saying insider-trading laws were too vague to determine whether he’d broken them.
The decision to pursue Soros without the support of the regulator was “rare” for French courts and done more “in consideration of the persona of Mr. Soros,” said Denis Chemla, a Paris partner in Herbert Smith LLP’s Paris office. The case spawned a lot of “fantasies, it was a French institution under attack by a cosmopolitan international financier.”
Soros turned to the human rights tribunal in December 2006 after he lost his appeal to the Cour de Cassation, France’s top court, which quashed the fine while upholding the conviction.
The human rights court can review whether the defendants’ human rights were respected. If he wins, Soros may ask French judges for the conviction to be overturned. Tomorrow’s decision can be appealed to the Strasbourg, France-based court’s Grand Chamber.
“We are hopeful that the court will rule along the lines of its preliminary judgment on admissibility last year,” Ron Soffer, Soros’s attorney, said in a telephone interview. “If it isn’t clear to the market regulator, then it should be presumed not clear; I don’t think the courts should apply novel interpretations of the law retroactively.”
The French government sold Societe Generale in June 1987 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, a Paris-based financier sounded out investors, including an adviser to Soros, about building a stake in the bank. Soros declined to take part in that operation, though his Quantum Fund bought 160,000 shares of Societe Generale between Sept. 22 and Oct. 17, 1988, according to the Strasbourg court. The fund sold the shares by November 1988, as the shares surged on the takeover talk.
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