Don’t Treat Us Like Terrorists, Insider Trading Suspects Say

Two men accused of insider trading told European Union judges that investigators shouldn’t have intruded into their privacy in the same way they’re allowed to in terrorist or spying probes.

Lawyers for independent traders Alexis Kuperfis and Lucien Selce -- who have been charged in France -- said at a Luxembourg court hearing Tuesday that only issues of national security could warrant some exemptions to strict EU privacy rules and allow investigators to access phone records.

“Insider trading cannot be equated with acts of terrorism or espionage,” Patrice Spinosi, a lawyer for Kuperfis, told a 15-judge panel at the EU Court of Justice. “While insider trading disrupts the markets, it does not destabilize and cannot destabilize state functions” or affect national security.

Both men deny the French insider trading allegations. 

The Luxembourg spat comes after France’s top court questioned last year whether evidence used to wiretap the burner phone of a banker indirectly passing confidential merger tips to traders was obtained illegally. But rather than throwing out France’s biggest insider-trading case, the top court referred the matter to the EU judges to decide whether the failings can be overlooked.

The latest dispute follows in a long line of cases seeking to rein in the rights of authorities to keep tabs on citizens. The EU’s top court in a 2014 ruling toppled rules requiring internet and phone companies to store swathes of customer data, saying this trampled on people’s privacy rights.

The court clarified last year that EU rules ban wide-scale measures forcing internet and phone operators to carry out “the general and indiscriminate transmission or retention of traffic data and location data.” Such data should only be accessed in case of a “serious threat” to national security, it said.

Tanguy Stehelin, a representative for the French government, said on Tuesday in the EU tribunal that the fight against serious crimes, such as insider trading, is “an essential state function” and one that isn’t less important than national security.

He said granting investigators access to detailed phone records is key in order to prosecute inside trades. It’s even sometimes “the only proof” of potential wrongdoing.

Stehelin added that suspects often use prepaid burner phones to communicate and identifying such secret lines is impossible if phone data isn’t stored and can’t be accessed.

The EU court’s ruling, which will be binding on member nations, will allow French judges to decide whether the contentious evidence is admissible in the case against Kuperfis and Selce.

Advocate General Peter George Xuereb said he will issue a non-binding opinion in the case on Nov. 18. The court’s ruling usually follows about four to six months later.

The cases are: Case C-339/20 VD, Case C-397/20 SR.

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