An investigating magistrate has completed the enquiry into Dominique Leroy, the former CEO of telecommunications company Proximus, and concluded there are indications she is guilty of insider trading in Proximus shares while she was in her post.
The sale took place in August last year, when Leroy sold a packet of Proximus shares for the sum of €285,342. Top executives typically receive company shares as part of their remuneration package, and at the time the sale went unremarked.
That changed a month later, when the Dutch telecoms company KPN announced that Leroy would be the new CEO. Given the time since the sale, it became clear that Leroy must have known about the appointment at the time she sold the shares. As the Proximus share price fell by 2% on the announcement of her departure, an investigation was opened into possible insider trading.
That led to searches of Leroy’s home and her office at Proximus, on the second-last day of her employment there.
Insider trading is the offence of dealing in shares that are publicly traded, based on information that is not available to the public. It is not an offence to cleverly predict market movements. It only becomes unlawful if one uses a privileged position to buy or sell shares based on inside knowledge.
In Belgium, the offence carries a penalty of one month to four years in prison, and a fine of up to €80,000. On top of that comes a penalty worth three times the profit gained from the trade, which in this case was €5,962.
But Leroy has already been penalised once. KPN reacted to the news that she was being investigated by dropping her appointment as CEO. Proximus, meanwhile, had already decided to replace her with Guillaume Boutin, who would incidentally encounter some difficulties of his own when it was brought to light shortly after his taking office in November last year that his CV did not quite match the full facts of his education.
Leroy maintains her innocence, claiming that at the time of the sale, she was involved in negotiations with Proximus about the renewal of her contract. Her defence will be that she could not have predicted the drop in the share price caused by a departure she was at the time in no position to predict.
Now that the investigation is compete, the dossier will pass to the prosecutor’s office in Brussels, which has to decide whether to take the case to court.
Proximus, meanwhile, declined to comment on what it described as a private matter.
Alan Hope
The Brussels Times
