Related News:
Former Freenet CEO Spoerr, CFO Krieger Win Reduced Insider-Trading Fines
Former Freenet AG Chief Executive Officer Eckhard Spoerr and Chief Financial Officer Axel Krieger won reductions in fines and asset seizures against them for criminal insider trading.
After rehearing the case, the Hamburg Regional Court today sentenced Spoerr to pay a fine of 75,000 euros ($97,500) and ordered him to give up 327,000 euros in profits made in the transactions. Krieger was fined 120,000 euros and the judges seized 324,000 euros in profits he made, court spokesman Janko Buesser said in an e-mailed statement.
When they were originally convicted on the charges of using insider information to sell shares in the German Internet and mobile-phone company last year, Spoerr was fined 300,000 euros and Krieger received a 150,000-euro fine. Both men have denied wrongdoing. While the Federal Court of Justice earlier this year upheld the conviction on appeal, it ordered the Hamburg court to re-sentence the men.
“The chamber seized the complete advantage the two defendants got from the illicit transactions,” said Buesser. “They didn’t have losses which other shareholders had.”
Marc Langrock and Otmar Kury, the men’s lawyers, said they would appeal today’s sentence as well.
“Today’s verdict, even though it reduced the sanctions by more that 50 percent, doesn’t comply with the requirements the Federal Court of Justice forcefully ordered,” the lawyers said in an e-mailed statement.
Wrongful Seizure
The trial judges wrongfully seized about 700,000 euros from each man, the equivalent of the sale price of the shares, the appeals court had ruled. It ordered the trial judges to recalculate the amount and to seize only that part of the sales price increased by selling early using inside knowledge.
Spoerr and Krieger each sold about 62,000 shares in several transactions for 1.2 million euros in July 2004, while knowing about the drop in sales in the second quarter that year, according to the trial court’s findings. The stock slumped 25 percent on Aug. 9, 2004, when Freenet reported its results.
Both men have said they had already decided in 2003 to sell the shares they were to receive under a stock option program as soon as they became available. The earliest possible date to sell those shares was July 2004.
Spoerr left Freenet in January 2009, shortly after the opening of the original trial. Krieger plans to leave the company by the end of the year, Freenet announced July 15.
To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net
Rate These Stories
Rate this Page