Suspicions. The Autorité des marchés financiers (AMF) on Friday demanded a total of €1.115 million in fines for 12 people suspected of insider trading in connection with Total's April 2018 takeover of Direct Energie.
The investors, the majority of whom are Spanish, are accused of having placed "atypical" buy orders on Direct Energie shares in the days before the announcement of the transaction, knowing of the discussions between Direct Energie's main shareholder and Total's management, the AMF explained during a session of the sanctions committee of the French stock exchange watchdog.
Read alsoA Total Direct Energie customer: "I was reduced to turning off the heating to save money"
The fines requested by the representative of the AMF Board range from €10,000 to €230,000 per person for the 12 men, including €200,000 for Sergio Val Allue, an executive of the Engie group at the time of the alleged offences. The information in question is the acquisition of a significant stake in Direct Energie by Total, announced on April 18, 2018, which would lead to the total takeover of the energy supplier by the hydrocarbon giant.
The Zaragoza Connection
According to the AMF, the transaction was the subject of an "agreement in principle" on April 6 between the management of Total, which has since been renamed TotalEnergies, and the main shareholder of Direct Energie. Mr Val Allue is accused of having passed on the information about the imminent takeover to his father Francisco Javier Val Aznar, who lives in Zaragoza in Spain, and of having himself invested a cumulative amount of some 80,000 euros even though he had "never invested in a French security", according to the rapporteur.
Several "related persons" - the father, but also friends and customers of the same bank as the father, as well as the manager of the local bank branch and his family - invested in Direct Energie securities in an "atypical" and "simultaneous" manner in Direct Energie securities in the days before the announcement and after the confidential agreement in principle, according to the AMF.
These transactions involved a total of thousands of shares, some of which were acquired the day before the announcement, which led to a sharp rise in the shares. These operations - worth several tens of thousands of euros - were carried out "in haste", according to the AMF. In total, 64% of the profits from Direct Energie shares between 6 and 18 April 2018 were made in Zaragoza, the College and the rapporteur noted.
"Bundle of Clues"
The AMF Board has requested a fine of €230,000, the heaviest sanction, for Francisco Javier Val Aznar. The defence of his son, Mr Val Allue, pleaded in particular for investments based on "objective elements" and purchases by residents of Zaragoza unrelated to the sharing of privileged information. Val Allue did inform his father of an opportunity to invest in Direct Energie, but only because of his assessment of the company's financial results and analysts' notes consulted, according to the defence.
In the College's view, however, he had been aware of the proposed takeover as part of his duties at Engie, shortly after the agreement in principle. The College is based on the principle of the "bundle of indices": a series of facts which, taken together, make it possible to establish that inside information is the only plausible explanation for transactions on the stock market.
"The accumulation of evidence is something that must be handled with care," said Antoine Vey, Val Allue's lawyer. "There was a circulation of information, but not privileged information." The AMF Board also demanded a fine of €200,000 for Jean-Luc Biamonti, who is also accused of having purchased securities with knowledge of the imminent takeover offer, without having any connection with the other defendants.
He could have been informed by a Direct Energie shareholder during a call "on or before April 7," according to the AMF. The appeal could therefore have taken place before the agreement in principle, his defence stressed. The committee's rapporteur considered that "the evidence used is not sufficient" and therefore recommended that it be cleared, but was not followed by the College. The AMF's decision is expected in the coming weeks.