Soros Fails in Bid to Clear His Name

The European Court of Human Rights ruled Thursday that French courts didn't breach European law when they convicted billionaire investor George Soros for insider trading in the late 1980s.

In a blow to Mr. Soros's two decade-long legal battle to clear his name, judges at the European court said that French law on insider trading was sufficiently clear to provide grounds for a conviction.

Mr. Soros's lawyer, Ron Soffer, said his client would appeal the decision. "There are some serious questions that still need to be answered," Mr. Soffer said.

The case dates back to 1988 when Mr. Soros invested in French bank Société Générale and sold his shares soon after for a profit. Mr. Soros has long said that he didn't benefit from insider knowledge when he bought the shares in the bank and argued that French rules on insider trading at the time were too vague for him to be found guilty of any crime.

In 1988 financier Georges Pébereau and a group of elderly businessmen, dubbed the "golden granddads," formulated a plan to buy a stake in Société Générale and force a takeover. Mr. Pébereau contacted an advisor of Mr. Soros to invite the billionaire to take part in the raid, according to court testimonies.

Mr. Soros declined but subsequently bought stakes worth a total of $50 million in four former state-owned companies in France, including Société Générale. The takeover by the "golden granddads" was ultimately unsuccessful but it did bump up Société Générale's share price.

In 1990 French prosecutors launched a probe. In 2002 a French court found Mr. Soros guilty of insider trading and issued a fine of €2.2 million ($2.9 million), which was reduced on appeal to €940,000.

Mr. Soros has long pleaded his innocence saying he didn't receive confidential information about Société Générale. In 2006 Mr. Soros, who is famed for making $1 billion in a bet against the British pound in 1992, took the case to the European Court of Human Rights. The court accepted the case under article 7 of the European convention of human rights, which states that no person may be punished for an act that wasn't a criminal offence at the time that it was committed.

In its ruling on Thursday, the European Court of Human Rights said in a statement that while the French law wasn't always precisely worded, professionals had a duty to be prudent in their work. Mr. Soros was a sufficiently experienced investor and "could not have been unaware that his decision to invest in shares in [Société Générale] entailed the risk that he might be committing the offence of insider trading," the court said in a statement.

Mr. Soros's lawyer said that in 1989 France's market watchdog conducted an investigation into the affair and concluded that French law wasn't clear. "If the law was not clear to the regulator, how could it be clear to Mr. Soros in New York," Mr. Soffer said. French law has since changed and now classifies such discussions as inside information.

Mr. Soros has three months to lodge his appeal to the Grand Chamber of the European Court of Human Rights. The chamber will then decide whether to hear the appeal in the coming three to six months, Mr. Soffer said.

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