(Bloomberg) -- A pair of investors in Delta Drone were fined a combined 600,000 euros ($520,000) for selling shares when they had non-public information in 2014 about the company’s financial difficulties.
The Autorite des Marches Financiers fined company co-founder Frederic Serre -- who’s been involved in a series of startups -- 200,000 euros on Tuesday for having sold a chunk of shares in the civil drone manufacturer after being told by the chief executive officer the firm might become insolvent. Another 400,000-euro civil penalty was issued against Pierre Tourrette, a Delta Drone investor who also received that information ahead of the public.
“Serre committed an insider violation on the Delta Drone security even as he was president of the executive board,” the AMF’s enforcement committee said in its fining decision. The AMF also highlighted that Tourrette should have known that knowledge about Delta Drone’s tense financial situation was insider information given that he’d previously been on the company’s supervisory board.
On May 25, 2014, Delta Drone’s CEO wrote in an email to Serre and Tourrette that the Grenoble-based firm listed on Alternext was in danger of becoming insolvent and going into receivership due to its treasury woes, according to the AMF’s decision. While this remained insider information for at least two months, Serre sold more than 100,000 Delta Drone shares in the interim and Tourrette shed over 200,000 shares.
Fabrice Dubest, who represented Serre and Delta Drone, said the facts of the case date back to 2013 and 2014 and concern people who no longer have any role or contact with the company. Serre’s lawyer didn’t immediately respond to request for comments.
Delta Drone has turned a corner since and the company’s financial situation is comfortable, according to the AMF decision.
Serre told the AMF that he sold the shares because he had plans to invest in a family real-estate project. Tourette said he wanted to reduce his exposure and have more cash at hand.
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