George Soros argued before the European Court of Human Rights that the French judgment had violated Article 7 of the Convention (nulla poena sine lege). The classic understanding of “insider trading” was that it is a use of “privileged information” by a person employed by the respective company or otherwise contractually related (§ 54). Does this conception cover Mr. Soros? The report of the French Commission of Stock Exchange Operations stated that it had been impossible to appraise whether the French law had forbade this kind of operations at the respective time (§ 14). However later the French law was amended in a manner making that operation clearly illegal.
The ECHR majority (4 versus 3) ruled on introduction of additional tests.
- The 4 judges stated that he had “to doubt” about that operation, since previously the French first instance tribunals had ruled that an insider employed by a company could not use privileged information for such a personal benefit (§§ 56-58). Note: this question never went to appeal or cassation stage.
- They qualified George Soros as “institutional investor”, and since he was this kind of person, he had to bring a “proof of increased prudence” (§ 59).