PARIS — Nicola Bulgari, former executive of Roman luxury house Bulgari, and his asset management firm Tara were convicted on Tuesday of insider trading, according to French news agency AFP.
As part of a prior admission of guilt procedure with the French national financial prosecution service, Bulgari and Tara were sentenced to fines of 1.2 million euros and 5.5 million euros, respectively. The former Bulgari co-owner was also handed a nine-month suspended jail sentence. Both sentences were approved by a judge of Paris’ judicial court.
The Roman jeweler’s former executive and the management company stood accused of benefiting from transactions effected on LVMH Moët Hennessy Louis Vuitton shares in 2016. The French luxury conglomerate had taken a majority stake in Bulgari from its founding family in 2011, in a cash-and-share transaction with a total value of more than $6 billion.
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According to the AFP’s report, Nicola Bulgari and Tara purchased respectively 20,000 and 82,600 shares of the French luxury group between July 6 and 18 of that year, which were then sold on July 27, the day after LVMH announced first-half results that led to a rise in its share price.
The gains had been 292,400 euros for him personally and 1.4 million euros for the asset management company.
The luxury group said it had recorded 17.2 billion euros for the first half of 2016, with a year-over-year organic revenue growth of 4 percent. Over that period, profit from continuing operations was flat at 2.95 billion euros, or $3.3 billion. Net profit increased 8 percent to 1.71 billion euros, or $7.12 billion, WWD reported at the time.
An administrative investigation had been launched in 2017 after the transactions were spotted by France’s Financial Markets Authority, which led to a preliminary inquiry in 2019 by the financial prosecution service.
While he initially contested the charges during his December 2021 testimony, Nicola Bulgari told the court at the sentencing hearing that he “had concluded it was time to admit the facts” after discussions with his counsel and “recognized what [he] had done, [feeling] guilty.”
While the investigation was unable to pinpoint the source of the information that led to the transactions, the “timely nature” and “unusual” operations, along with the “absence of convincing explanations” from the former Bulgari executive and “a plausible information transmission circuit” supported the insider trading charges, according to prosecutor Laurent Couderc.
Tara and Nicola Bulgari could not be reached for comment.