Insider-Trading Suspect Loses Bid to Spike French Airgas Charges

(Bloomberg) -- France's top court denied an appeal by a Geneva trader charged with insider trading who argued that the country's laws didn't cover certain types of derivatives.

The Cour de Cassation dismissed the constitutional challenge lodged by Lucien Selce, who was charged as part of French investigations into trades before 2016 related to chemical producer Airgas Inc. and oilfield surveyor CGG SA. He argued that the law on insider trading was was vaugue before it was modified three years ago to include derivatives known as Contracts for Difference.

The law “is sufficiently clear and precise” to prevent any risk of an arbitrary interpretation, judges at the Cour de Cassation said in their ruling dated July 10, but released only this week.

The charges in the CGG case came to light two years ago when, in a separate court proceeding, Selce's lawyer contested methods investigators used to trace his client's trips to a luxury Alpine ski resort and the island of Corsica. The Swiss resident is among a group of seven men who have been charged in France in connection with trading ahead of Paris-based Air Liquide SA's $10 billion takeover of Airgas four years ago. All have denied the charges.

CFDs allow a person to bet on a company's stock without owning shares. With a relatively small down payment, profits and losses can exceed those when buying shares. Many countries have restricted their sale because retail investors can underestimate the risks and incur outsize losses.

Selce's lawyer, Frederic Peltier, criticized the ruling.

“Should we blindly trust judges to understand the scope of a law that might have an unlimited reach?” he asked. “This decision is the antithesis of what a constitutional check on the precision of laws should be.”

Selce, the co-founder of Geneva-based Vista Capital Management SA, is suspected of having illegally made nearly 8 million euros ($8.9 million) on the Airgas trades. His gains in the CGG transactions, which his lawyer has said took place between 2014 and 2015, aren't publicly known.

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, Alan Katz

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