Billionaire Paul Singer’s Elliott Management Corp. was fined 16 million euros ($22 million) by France’s markets regulator for insider trading of a toll-road company.
The Autorite des Marches Financiers found that Elliott used material nonpublic information in the purchase of shares of Autoroutes Paris-Rhin-Rhone SA in 2010, according to a letter the hedge-fund firm sent to clients today. The AMF had said Elliott’s U.K. unit traded in the company while negotiating to sell its stake in the road company to a third party. The regulator told Elliott the hedge-fund firm didn’t commit market manipulation or artificially inflate the share price.
The APRR purchases were made as part of a long-standing trading strategy dating to 2005, the New York-based firm wrote in the letter, a copy of which was obtained by Bloomberg News. Elliott, which oversees $24.1 billion, said it disagreed with the AMF findings and intends to appeal.
“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 firm said in the letter, referring to procedures to prevent private information being transferred between units within a firm.
Stephen Spruiell, a spokesman for Elliott, declined to comment beyond the letter.
The firm had received a “letter of grievance” in December 2012 from the AMF that said Elliott may have purchased APRR shares between May 28, 2010, and June 11, 2010, based on material, nonpublic information. Elliott had disclosed that Eiffarie, a joint venture owned by construction company Eiffage SA (FGR) and Macquarie Group Ltd.’s infrastructure unit, planned to buy Elliott’s APRR shares.
The French regulator said the hedge-fund firm may have inflated the stock price before selling and made a profit of about 2.75 million euros.
At a hearing in Paris last month, AMF representatives had recommended fining Elliott 40 million euros, a person with direct knowledge of the matter said at the time. Elliott said today that none of the costs associated with the matter, including the penalties, will be borne by Elliott funds.
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