European court rules against Soros in trading case
PARIS (AP) — The European Court of Human Rights ruled Thursday that France did not violate George Soros' rights when convicting him of insider trading, defeating a years-long effort by the billionaire financier to clear his name.
Though Soros has faced criticism for other investment decisions before and since, the French conviction over trades in 1988 left a particular stain on the Hungarian-born businessman and philanthropist's five-decade career.
He was fined euro2.2 million in 2002, or $2.92 million at current rates, for purchasing shares in French bank Societe Generale in 1988, days after being informed about a planned takeover bid for the bank.
That was the amount he was accused of making when he sold the shares shortly afterward. France's highest court reduced the fine in 2007 to euro940,000 ($1.25 million at current rates).
Soros argued that France's insider trading rules at the time were unclear, and that the length of the investigation — from 1993 until his indictment in 2000 — made it difficult to call reliable witnesses, violating his right to a fair trial under the European Convention on Human Rights.
The human rights court, based in Strasbourg, France, disagreed. In a 4-3 decision, the panel of judges argued that "the law applicable in 1988 was sufficient for Soros to have been aware that his conduct might be unlawful."
The Soros Foundation in Paris would not comment on the decision, and Soros' lawyers could not immediately be reached.
Soros, who emigrated to the United States in 1956 and set up Soros Fund Management in 1973, now heads a philanthropic network that has funneled massive sums into education, public health, science and non-governmental groups, mostly in the former communist bloc.
Soros has been criticized in some quarters for speculating on the collapse of Asian currencies in the late 1990s. More recently he has become a lightning rod for conservative critics in the United States, in part because some of his donations have involved causes such as climate change and legalized recreational use of marijuana.
In testimony in the trading case, Soros acknowledged hearing from Paris financier Georges Pebereau in September 1988 about his plans for a takeover of Societe Generale, but denied this amounted to confidential or insider knowledge.
Soros called the original guilty verdict a "gift to my enemies."
The European court acknowledged that the definition of insider trading in the 1967 law applicable to the Societe Generale trades was "quite general," according to a statement.
The ruling said Soros was the first person to be prosecuted in France for "that type of offense," which meant that the French courts didn't have any precedent upon which to base their rulings.
However, the court found that France could "not be criticized for any failure" involving the wording of the law.
"As a result of his status and experience, he could not have been unaware that his decision to invest in shares in (Societe Generale) entailed the risk that he might be committing the offense of insider trading. Bearing in mind that there had been no comparable precedent, he should have been particularly prudent," the court said.