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Use of inside information: AMF Enforcement Committee imposes its largest-ever fine

Published on November 14, 2013

In a decision handed down on 18 October 2013, the Enforcement Committee of the French securities regulator, Autorité des Marchés Financiers (AMF), imposed a €14 million fine on Mr. A for using inside information about a takeover bid for Geodis by the French railway operator SNCF, and a €400,000 fine on Mr. B for having divulged the information.

It was alleged that:

  • Mr. A used inside information about a forthcoming bid from SNCF for Geodis. Between 20 March and 4 April 2008 he acquired 101,287 contracts for difference(1) (CfDs) on Geodis stock along with 6,500 Geodis shares for a total of slightly more than €8 million, allowing him to make a capital gain of some €6.2 million once the tender offer was made public on 6 April 2008;
  • Mr. B, managing director at an investment bank that jointly submitted the Geodis bid, passed on inside information held in connection with his job to his cousin, Mr. A .


In an initial decision on 12 April 2013, the Enforcement Committee validated the proceedings brought against the persons in question and established the existence as of 14 March 2008 of the inside information, which came to the attention of Mr. B before or no later than 20 March 2008. However, the Enforcement Committee adjourned the hearing pending a supplemental investigation, ordered after Mr. A produced documents which tended to suggest that, prior to 20 March 2008, he had placed unexecuted buy orders for Geodis CfDs. Accordingly, the decision the Enforcement Committee is announcing today was taken after a follow-up meeting on 20 September 2013.

The Commission stressed in its decision that the acquisitions made by Mr. A, a sophisticated market professional, were both uncharacteristic of his usual decisions and highly risky in view of the downtrend and lack of liquidity in Geodis shares. It infers that the only explanation for the acquisitions at the date from which they were initiated is the certainty that the share price would rise.

A number of additional factors, the chief of which are listed below, bear out this analysis:

  • Mr. B most probably received the inside information at or around 7 pm on 19 March 2008 when he met with the vice chairman of UBS,
  • Mr. A made his initial purchases less than 24 hours after that meeting,
  • the two accused have family ties as well as business dealings that are contemporaneous with the facts of the dispute,
  • the negative answers given during the supplemental investigation, in particular by the persons responsible for marketing the Geodis CfDs acquired by Mr. A and from the institutions responsible for hedging the positions, confirmed the other facts of the case that challenge the existence of buy orders prior to 20 March 2008. Mr. A mentioned these orders for the first time to the rapporteur even though neither he nor his broker had ever referred to them during the investigation.


When setting the amount of fines, up to a maximum of €1.5 million or ten times the profits made, the Commission took into consideration:

  • the nature and importance of Mr. B's duties at the bank jointly submitting the bid, whereby he was required to refrain totally from passing on the inside information to which he had access;
  • Mr. A 's status as a market professional, which required him to be particularly aware of his duty not to divulge inside information, as well as his profit of more than €6 million.


(1) A contract for difference is a financial instrument covering the difference between the value of a security when the contract is signed and when it matures.

AMF Communication Directorate – Florence Gaubert - T: +33 (0)1 5345 6034 or +33 (0)1 5345 6028 

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