S&P Analyst Fined for Using Mom's Bank Account for Insider Trade

(Bloomberg) -- A former Standard & Poor’s analyst was fined 90,000 euros ($107,000) after he admitted to French investigators that he used his mother’s bank account to place three trades on Vallourec SA shares based on inside information he had gleaned from the company as part of his job.

The enforcement committee of the Autorite des Marches Financiers said the breaches carried out by Lucas Sevenin, formerly an analyst focusing principally on the oil and gas sector before being fired for gross misconduct, were “particularly serious.”

“Repeatedly over three years, Sevenin committed insider offenses on the Vallourec stock even as, in his role as principal and then secondary credit analyst on this stock at S&P, he was the main interlocutor of Vallourec, in charge of its rating and its annual coverage,” the enforcement committee said in its decision published Wednesday on the AMF’s website.

It’s the second French insider trading case in the last few weeks where the wrongdoing was carried out using the mother of one of the accused men as a veil. On Tuesday, two men were fined a total of 946,000 euros after being snared in an insider-trading probe by a cell phone linked to one of their moms.

Sevenin’s lawyer, Francois Esclatine, declined to comment. The former S&P analyst has already had to pay 350,000 euros to settle a criminal probe in Belgium.

Regrets

During the hearing last week, Sevenin expressed “regrets” and told AMF regulators that he’s trying to put the matter behind him.

“As analyst on Vallourec, I used confidential information that the company had shared with me for my trades,” Sevenin said. “At the time, I hadn’t measured the gravity of my actions, it seemed a bit virtual.”

Sevenin, who had a power of attorney for his mother’s bank account, made around 2,500 euros acting on insider information he received ahead of the announcement of Vallourec’s results for the second quarter of 2013, Virginie Adam, an AMF official, said at the hearing.

After obtaining information ahead of its official publication in April 2015 concerning planned job cuts of about 2,000 staff and negative first-quarter results that sent shares down, Sevenin was able to avoid more than 44,000 euros in losses, Adam said. He also traded on confidential data ahead of Vallourec’s results for the fourth-quarter 2014, but lost about 6,600 euros, she said.

To contact the reporter on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Peter Chapman

©2017 Bloomberg L.P.