Elliott Fined For Insider-Trading

May 5 2014 | 2:42pm ET

Elliott Management has been fined €8 million for insider-trading by France’s market regulator.

The Autorité des Marchés Financiers alleged that Elliott had improperly bought shares of highway company Autoroutes Paris-Rhin-Rhône, just before it and another money manager sold their 13.7% stake in the company to construction firm Eiffarie. AMF said that the purchases drove up APRR’s stock price, resulting in €2.75 million in ill-gotten gains.

Elliott, which denied wrongdoing, pledged to appeal the ruling.

“The decision represents a misapplication of French law and is not supported by the evidence,” Elliott said. “Elliott’s trading in APRR did not at any time make use of any material non-public information and was for a legitimate business purpose. Elliott purchased APRR stock on over 300 trading days between December 2005 and June 2010 as part of a longstanding trading strategy.”

Elliott has previously said it had a “Chinese wall” in place to keep its traders from knowing about the deal with Eiffarie.

“Despite an investigation which included extensive reviews of e-mails, audiotaped trading lines and interviews with witnesses, the AMF offered no direct evidence that Elliott’s Chinese wall was breached.”

The hedge fund said the costs of defending the case and any fines would not be borne by investors.

Elliott appears to have gotten off somewhat easily: AMF staff last month recommended that the firm be fined €40 million.


In Depth

Q&A: Fund Administration Comes To The Cloud

Jul 14 2017 | 7:23pm ET

The fund administration sector has been steadily implementing new technology, such...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...

 

From the current issue of