Acquisition of Direct Energie by Total: the AMF demands a fine of 1.115 million euros for insider trading

The Financial Markets Authority (AMF) on Friday requested a total of 1.115 million euros in fines for 12 people suspected of insider trading in connection with the April 2018 takeover of Direct Energie by Total.

The investors, a majority of whom are Spanish, are accused of having placed “atypical” purchase orders on Direct Energie shares in the days preceding the announcement of the transaction with knowledge of the discussions between the main shareholder of Direct Energy and the management of Total, explained the AMF during a session of the sanctions commission of the French stock market watchdog.

The fines requested by the representative of the AMF College range from 10,000 euros to 230,000 euros per person for the 12 men, including 200,000 euros for Sergio Val Allue, executive of the Engie group at the time of the incriminated facts. The rapporteur of the sanctions committee, for her part, proposed to uphold the complaints against nine of the 12 people, and to exonerate three of them, but was not followed by the AMF College.

The information in question is the repurchase of a significant stake in Direct Energie by Total, announced on April 18, 2018. The operation was, according to the AMF, the subject of an “agreement in principle” on April 6 between the management of Total, since renamed TotalEnergies, and the main shareholder of Direct Energie, one of the main French energy suppliers.

Sergio Val Allue is accused of having transmitted information about the imminent takeover in particular to his father Francisco Javier Val Aznar, resident in Zaragoza in Spain, and of having himself invested a cumulative amount of some 80,000 euros while he had “never invested in a French security”, according to the rapporteur.

Several “related persons” – notably the father, but also friends and clients of the same bank as the father, as well as the director of the local bank branch – invested in an “atypical” manner in Direct Energie securities in the days preceding the announcement and after the confidential agreement in principle, explained the commission rapporteur and the representative of the College.

Transactions involving thousands of shares in total, some acquired the day before the announcement, which led to a sharp rise in the stock. The college requested a fine of 230,000 euros for Francisco Javier Val Aznar. Sergio Val Allue's defense notably argued in favor of investments based on “objective elements” and purchases by residents in Zaragoza unrelated to the sharing of privileged information.