HFs May Be Kissed With French Sanctions

It didn’t take long for the Autorité des marchés financiers to decide some hedge funds were ripe for sanctions.

It didn’t take long for the Autorité des marchés financiers to decide some hedge funds were ripe for sanctions. Just a couple of weeks back, the French regulator announced an investigation into insider trading involving domestic telecom Alcatel and five hedge funds, including GLG Partners. GLG has had its share of the media light lately, with a recent £750,000 (US$1.3 million) fine from the U.K.'s Financial Services Authority over trading practices by its Philippe Jabre. The French agency, however, has more than GLG in its sights, as Ferox, Meditor, UBS O’Connor and Marshall Wace have come under increased scrutiny.

Now, according to Financial News, Marshall Wace wasted no time attacking the AMF allegations and claimed they are misguided, as the insider-trading allegations are based on what it says is an incorrect statement by JPMorgan, which said Marshall Wace had acquired ordinary shares of Alcatel a minute before announcing it was issuing convertible bonds. But Wace said JPMorgan realized later that it was mistaken, that the purchase was actually made after the announcement, and apologized. Not that it has yet helped Wace in this matter. Wace can only hope now that France’s sanctions commission will reject the penalties against the firm; it may also nix the sanctions against the other firms as well, FN reports.