Wednesday, 17 September 2014
Last updated 18 min ago
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.
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