Soros fails to quash insider trading conviction

7 October 2011 | By Gary Jackson

Soros (pictured) was convicted of insider trading and sentenced by French courts after his Quantum Fund made a profit from investing in the stock of Société Générale in the late 1980s.

French financier Georges Pébereau and a group of businessmen had approached Soros with a plan to acquire control of the bank, court testimonies say.

Although Soros declined to participate in the raid, which was ultimately unsuccessful, he bought shares in four former state-owned companies, including Société Générale.

The French authorities considered this to be insider trading and launched an investigation in 1989. In 2002, Soros was found guilty and fined €2.2m (£1.9m), which was the profit he made in the deal, but it was reduced to €940,507 on appeal.

In 2006, Soros lost an appeal to quash the conviction with France’s highest court. He then took the case to the European Court of Human Rights.

A statement issued today by the European Court of Human Rights reveals the investor has been unsuccessful in his latest attempt.

The judgment reads: “The court observed that, at the relevant time, Mr Soros was a famous institutional investor, well-known to the business community and a participant in major financial projects.

“As a result of his status and experience, he could not have been unaware that his decision to invest in shares in [Société Générale] entailed the risk that he might be committing the offence of insider trading.”

The judgment also conceded that the definition of the term ‘insider’ could be confusing under French law, but says the courts that tried Soros “had found the law sufficiently precise for him to be aware that he should not invest in shares [in Société Générale] after being contacted by [Pébereau]”.

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