Posted on 11/28/2003 4:57:58 PM PST by Liz
Associated Press
11-08-2002
Dateline: PARIS
American billionaire investor George Soros, on trial in a 14-year-old insider trading case, told a court Friday that he didn't have privileged information when he bought shares in French bank Societe Generale.
Soros and two other businessmen are on trial at the Paris Criminal Court, accused of benefiting from insider knowledge when they bought the bank's stock in 1988 before a failed takeover that pushed up the price.
"I have been in business all my life and I think I know what is insider trading and what isn't," said the president of Soros Fund Management, in court with six defense lawyers.
Asked whether he had ever been accused of insider trading in another case, Soros replied, "No, never."
Hungarian-born Soros has been on trial since Thursday along with two others: Jean-Charles Naouri, former head of the office of France's then-Finance Minister Pierre Beregovoy; and Lebanese businessman Samir Traboulsi. Both contest the charges.
Societe Generale was privatized in 1987. A year later, its stock price went up during an unsuccessful takeover bid. The defendants are accused of having obtained insider information before the abortive corporate raid pushed up its stock price.
The 72-year-old defendant took the stand for 20 minutes on Friday, speaking through a French interpreter. He has been under investigation for 12 years in the case. A prosecutor said the case has dragged on because Swiss authorities took years to respond to requests for information.
Soros said he was interested in Societe Generale based on information he said was widely known at the time: France's new leftist government favored takeovers to change leadership at major French companies that had recently been privatized.
At the time, Soros was buying up stock in many companies and had no reason not to include Societe Generale. Afterward, however, he sold the stock because he felt the takeover attempt was motivated by the wrong reasons.
"I realized very quickly that it was political and not something that was going to have an effect on management," he explained.
Soros is accused of profiting by US$2.2 million in the affair.
He is one of the four defendants left of 11 people who were originally placed under formal investigation, following a French judge's decision to dismiss charges against the others. Two other businessmen implicated in the scandal _ Edmond Safra and Robert Maxwell _ have since died.
Former French banker Jean-Pierre Peyraud was also scheduled to stand trial this week, but the court ruled the 88-year-old must undergo a medical analysis because of problems with his memory and cardiovascular system. His case will come up again in January.
As the trial opened a day earlier, Soros said he was sure he would be exonerated. Defense lawyers argued unsuccessfully Thursday that the case should be thrown out because it took so long to bring to court.
Soros was reportedly the first American to earn a billion dollars in a single year. Born in Hungary in 1930, he emigrated to the United States in 1956 and became a citizen five years later. In 1973, he established the Soros Fund Management with Quantam its principal fund. He has spent recent years engaged in philanthropy.
A charge of insider trading can bring a maximum of two years in prison and a 1.5 million euro (US$1.5 million) fine, though such a heavy sentence would be highly unlikely in the case.
The trial is expected to last until a final hearing on Nov. 20, and the verdict will likely come later.
(parf-ad-ps)
Copyright 2002, AP News All Rights Reserved
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