PARIS -- Pierre Berge has been fined $505,000 (3 million francs) by France's Commission des Operations des Bourses (COB) for alleged insider trading. However, whether he'll have to actually pay the fine won't be known until the case is finally decided...
PARIS -- Pierre Berge has been fined $505,000 (3 million francs) by France's Commission des Operations des Bourses (COB) for alleged insider trading. However, whether he'll have to actually pay the fine won't be known until the case is finally decided by the Paris Court of Appeal.
The COB, the French equivalent of the Securities and Exchange Commission, set the fine on Tuesday, the same day its attorneys argued in the court that Berge had realized a capital gain of $5.1 million (30 million francs) from the sale of a large chunk of Yves Saint Laurent Groupe SCA stock in 1992, shortly before the company announced poor first-half results.
Berge was then chairman of the YSL Groupe, which was sold last spring to Elf-Sanofi. He now is president of the YSL Couture part of the business. The probe into the stock trading has been going on since last spring.
"Unfortunately, under French law, the COB is allowed to effect these sorts of punitive sanctions," said Guy Danet, Berge's lawyer. However, he noted, the Court of Appeal agreed that the fine would not be levied ahead of a ruling on the insider case, which the court will deliver on March 2.
A spokesman for the COB declined any comment on the fine, other than to say, "We acted completely within our powers."
Danet also denied that Berge had realized any capital gain: "That's simply not the case. If anything, Berge made a substantial loss."
Berge and designer Yves Saint Laurent went heavily into debt in 1991 after buying a 15 percent stake in their business from the troubled Italian financier Carlo de Benedetti for just over $100 million.
In the summer of 1992, Berge and Saint Laurent sold the several hundred thousand YSL shares to a number of Swiss banks to meet the payments on the debt they had incurred.
"Mr. Berge and Mr. Saint Laurent bought de Benedetti's stock for 850 francs [a share], but they were forced to sell it for 750 francs," Danet said. "It's true that YSL stock was trading at about 720 francs at the time, but they certainly didn't gain from this transaction."Danet said the banks insisted Berge sell some YSL shares: "We have a letter from a bank where it specifically requests this." Berge himself could not be reached for comment.
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