(Bloomberg) -- A Morgan Stanley banker and a U.K. hedge fund manager who dabbles in high-stakes poker fought insider-trading allegations at a Paris hearing Friday that revealed deep disagreements within France’s markets regulator about the case.
Morgan Stanley Managing Director Daniel Lewis was accused by Autorite des Marches Financiers investigators of sharing sensitive information about a 2012 deal with Talal Shakerchi, the founder of Meditor Capital Management Ltd.
But the investigators’ findings were quickly criticized by AMF officials at the hearing, one of whom said Lewis’s conduct was “prudent” and another who said she wouldn’t recommend any fines against the men.
Patricia Lazard Kodyra, the AMF rapporteur who reviews the investigation, said that Lewis didn’t share any inside information in a Jan. 5, 2012, phone call with Shakerchi, days before the sale by Spanish toll-road operator Abertis Infraestructuras SA of part of its stake in French satellite company Eutelsat Communications SA. Shortly after the conversation, Shakerchi placed an order to short Eutelsat shares.
“Lewis simply confirmed information Talal Shakerchi already knew” about a sale that was expected by the market, Lazard Kodyra said.
Lewis acted “professionally” during the phone call, sharing no information on the price or the date of the sale, said Arnaud de la Cotardiere, a lawyer representing both the bank and Lewis. Michael Wang, a Morgan Stanley spokesman, declined to comment.
The schism between AMF officials and investigators can occur in a complicated process that snakes between multiple regulatory bodies before arriving at a public hearing. The regulator’s enforcement committee, which decides whether to issue administrative sanctions, should rule within the next few weeks.
“This case should never have arrived in front of the enforcement committee,” Shakerchi’s lawyer, Thierry Gontard, said at the hearing, adding that it had been “poorly analyzed” by investigators.
Shakerchi, who goes by the nickname “raidalot,” made $1.5 million last year after winning a three-day online poker event organized by Pokerstars.
"Morgan Stanley didn’t have insider information and even if it did it wasn’t communicated during the call," Shakerchi said. “I’ve already been actually pretty heavily punished for something I didn’t do.”
--With assistance from Donal Griffin
To contact the reporter on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net.
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Ross Larsen
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