Court convicts American on insider trading charges
PARIS -- American billionaire financier and philanthropist George Soros was convicted of insider trading Friday and fined $2.2 million by a French court. Soros said he was "astounded and dismayed" and vowed to appeal.
The 72-year-old Soros denied having inside information about a pending takeover attempt of French bank Societe Generale when he traded its shares 14 years ago.
"The charges against me are unfounded and without merit," Soros said in a statement. He was not in court for the verdict.
Defense lawyer Bernard du Granrut said the court "did not acknowledge the essential elements of the arguments we presented."
The court judgment said Soros had inside knowledge of the takeover bid because the financiers behind it asked him to participate. Soros declined, but then bought 160,000 bank shares for his Quantum Fund and gained $2.28 million from their sale in 1988, the court said.
The fine levied Friday was the minimum allowed under French law and mirrored the amount he made from the Societe Generale transaction. Soros could have faced up to two years in prison and a fine of up to four times the amount earned.
The court cleared two other men of insider trading charges: Jean-Charles Naouri, former top aide to France's then-finance minister, and Lebanese businessman Samir Traboulsi.
Soros, a naturalized American born in Hungary, amassed a fortune and a reputation as a financial wizard by managing investment funds. Forbes magazine estimates his wealth at $6.9 billion, making him the 37th-richest person in the world.
But his dealings also have drawn criticism.
When Asian economies tanked in the late 1990s, some politicians blamed Soros' currency speculation for the crisis. Malaysian Prime Minister Mahathir Mohamad called Soros a "criminal" and a deputy prime minister of Thailand suggested that gangsters should kill him.
In Britain, Soros became known as the man who broke the Bank of England after he bet against the British pound in 1992. He earned an estimated $1 billion when the pound's value collapsed.
Societe Generale was privatized in 1987. A year later, its stock price rose during an unsuccessful takeover bid.
French regulators first noticed anomalies in the stock surge in 1989. Soros was put under judicial investigation -- one step short of being charged -- in 1993.
In all, 13 people were investigated in one of France's biggest political scandals of the 1980s. Only Soros, Naouri and Traboulsi went to trial.
During the one-week trial last month, Soros denied having privileged information. He said he was interested in Societe Generale based on information he argued was widely known: that France's leftist government of the time favored takeovers to change leadership at major companies that recently were privatized.
Soros said he was buying stock in many companies and had no reason not to include Societe Generale.
"I have been in business all my life, and I think I know what is insider trading and what isn't," he said.
A spokesman for Soros, Michael Vachon, said it was the first time the billionaire was convicted of a crime. He also said Soros has no other cases pending against him.
Soros is president and chairman of Soros Fund Management LLC, the primary adviser to the Quantum Group of Funds.
Quantum evolved from a fund Soros created in 1973 with about $12 million. Today, Quantum manages funds worth about $7 billion, said Vachon, the financier's spokesman.
Such funds borrow money to bet on stocks, bonds, currencies and commodities worldwide.
Soros also heads a philanthropic network that has funneled huge sums into education, public health, science and non-governmental groups, mostly in the former communist bloc. His foundation gives away about $500 million a year, Vachon said.