Wealth Manager Loses $1.2 Million Insider-Trading Bail Fight
(Bloomberg) -- A Swiss wealth manager embroiled in an insider-trading case linked to Air Liquide SA’s $13.2 billion takeover of Airgas Inc. has lost his bid to avoid posting bail of 1 million euros ($1.2 million).
A ruling from France’s top court revealed that a man identified as Thierry Z., working for wealth-management firm Stokors SA, was charged by criminal authorities late last year “for enabling the acquisition of shares by a third party on the basis of insider information.”
The charges relate to a transaction that generated a 4.4 million-euro profit for his client, Mr. A., according to the previously unreported April 10 ruling at Paris’s Cour de Cassation that was posted online last week.
French criminal enforcers are taking a renewed interest in hunting down insider trades in a country where such cases rarely make the headlines. The most prominent insider-trading case in recent years, involving top executives at the entity that became Airbus SE, collapsed in spectacular fashion after almost a decade of investigations when their defense lawyers successfully argued double jeopardy.
While a milllion-euro bail was also required of former co-Chief Executive Officer Noel Forgeard, it’s not usual for investigators to demand such high amounts from individuals. Still, French investigators are requesting bail more often in white collar cases as a way to increase pressure on suspects, according to Alexandre Bisch, a lawyer at Debevoise & Plimpton in Paris.
“One million euros isn’t trivial,” Bisch said by phone, explaining that the seriousness of the infringement isn’t the most important criterion in setting the amount. “It depends on the wealth of the individual so that the measure hurts while remaining measured.”
The case involving the wealth manager concerns allegations certain people were tipped off in advance that Air Liquide was going to acquire Airgas and that they traded on the knowledge, according to a person familiar with the case, who spoke on condition of anonymity.
The judges upheld a non-public ruling from a lower court that said the 1 million-euro bail was needed to ensure Mr. Z., who is a Swiss national and resident, doesn’t vanish during the probe, and to cover for any penalties and damages in case of a conviction. The top court judges reiterated that the lower court had required the bond be posted by March 1. The man’s lawyer declined to comment.
France’s financial prosecutor, known as the Parquet National Financier, declined to comment. In France, charges can be pressed -- and can be dropped -- prior to any decision on whether to send a case to trial when there is serious and consistent evidence showing likely involvement.
While France’s recent enforcement activity has mostly gone unnoticed, certain clues suggest their scope is far-reaching.
Last year, former Societe Generale SA managing director Stephane Fima revealed in an employment lawsuit that he had been charged in the case focusing on suspected insider trading around the Airgas takeover announcement in 2015. He also divulged that his office at the bank’s headquarters in the La Defense business district in western Paris had been raided by police investigators. Fima, who was fired by the bank, has denied taking part in insider trading.
Geneva financier Lucien Selce also disclosed last year he had been charged in separate proceedings as part of a French probe into the trading of shares of CGG SA in 2014 and 2015. Selce’s lawyer said at the time that the case concerning his client was separate from “a very large criminal probe that concerns several securities” in order to focus solely on trading of CGG shares. Selce contests the accusations he faces.
©2018 Bloomberg L.P.