A staffer at Paris hedge fund Syquant Capital is suspected of funnelling insider tips to his brother to make a spate of winning trades on stocks such as ArcelorMittal SA and Alstom SA just before market-moving announcements.
 
Investigators at France’s stock regulator raided the financier’s home last September, scanning his laptop and three iPhones as well as his Instagram and Facebook accounts for evidence, according to a ruling earlier this month rejecting his challenge to the inspections.

While the suspicious profits that triggered the raids aren’t huge, their regularity and the number of stocks scrutinised by investigators - as many as 22 different companies - is uncommon. The man’s identity was anonymised and it was also unclear whether he’s still employed by Syquant. The firm’s website says the fund was founded in 2005 and manages €3.1 billion , specialising in “event-driven investment.”

Syquant representatives and France’s Autorité des Marchés Financiers didn’t immediately respond to requests for comment. A lawyer for the suspect declined to make any statement.

The AMF only has civil fining and banning powers but criminal authorities in France have also pursued insider-trading cases. Last month, one such investigation into two traders suspected of making €20 million from tips was kept alive by a Paris court as their long-running privacy bid collapsed.

The Paris case focuses specifically on five suspicious gains made in less than a year between 2020 and 2021. Each time, Syquant had access to insider information after companies reached out through their advisers to potential investors to sound out interest ahead of an announcement. 

The staffer’s brother subsequently used derivatives known as contracts for difference or CFDs to bet on a dip for these stocks, making as much as about €45,000 on the Swedish steel firm SSAB AB.

For the smallest profit highlighted by investigators - just under €9,000 - the brother started placing Alstom trades just a quarter of an hour before Bouygues SA said it was selling 11 million shares it owned in the trainmaker, equivalent to a stake of nearly 5%. Trades in food deliverer Just Eat Takeaway.com NV and ArcelorMittal were linked to planned capital-raising of €1 billion and US$2 billion respectively.

After analysing IP addresses, investigators consider it’s “very probable” that several of the trades were made at Syquant’s premises by the fund’s employee on behalf of his brother, according to the ruling.

As part of the court case, the AMF also disclosed that the suspect’s brother carried out many “opportunistic and atypical transactions” in a number of other securities. The case is also focusing on an unidentified woman’s trades.

  - Bloomberg