France knows about Elliott from before Elliott reveals insider trading inquiry
Who was Elliott going to sell XPO to? Sounds like they were possibly working with someone as in this 2013 investigation.
Previous Elliott run in with France, don't know how it came out.
January 5, 2013 2:48 am
By Dan McCrum in New York
Elliott Management, the $20.5bn hedge fund, has disclosed an investigation by a French regulator into alleged insider trading by its UK unit during 2010 in the shares of Autoroutes Paris-Rhin-Rhne, a French toll road company.
The hedge fund run by Paul Singer said in a regulatory filing sent to investors and reviewed by the Financial Times that it had received a “letter of grievance” from the Autorit des Marchs Financiers that said trading in APRR may have been designed to boost the share price of the French group ahead of the sale of Elliott’s stake.
In June 2010 Elliott and another asset manager together sold a 13.7 per cent stake in APRR worth €900m to Eiffarie, a joint subsidiary of French construction group Eiffage and Macquarie, that wished to take its holdings of the group to more than 95 per cent.
The AMF has raised questions, the hedge fund said, about trading in APRR ahead of that sale. The French regulator has said that Elliott inflated the price of the group and may have made a profit of about €2.75m.
Elliott said the regulator’s letter has initiated an administrative proceeding that it intends to defend “vigorously”, with no costs or potential penalties borne by investors in its funds.
It said its “purchases of APRR stock were made as part of a long-standing trading strategy dating to 2005”. A person familiar with the situation said the hedge fund’s strategy was to build a stake that was large enough to sell to Eiffarie and take it past the 95 per cent ownership mark.
The hedge fund said the probe concerned trading on the final 11 of 300 trading days between December 2005 and June 2010 on which it bought APRR stocks. Elliott declined to comment beyond its regulatory filing.
A person familiar with the situation said trading in APRR was affected by the removal of the company from inclusion in an MSCI index on May 26 2010, and that Elliott bought stock as it was sold by index-following funds.
The person said that so-called “Chinese walls” were in place to prevent the transfer of non-public information within the hedge fund, and that no Elliott employees had been disciplined or dismissed.
As part of the French administrative process, Elliott will prepare a response to the letter, and a rapporteur who will prepare the case for an eventual civil hearing may request further evidence.
Elliott, which like most US hedge funds was required to register with the US Securities and Exchange Commission last year, disclosed the investigation in an amendment to its regulatory filings.
https://www.ft.com/intl/cms/s/0/3c5cf61a-56c6-11e2-aad0-00144feab49a.html#axzz3djv6vY9I