Allegations of Insider Trading Against Major Shareholder of French Biotech Corporation

An Analysis Group team, led by Managing Principal Marc Van Audenrode, was retained by lawyers from Linklaters LLP to help their client - the major shareholder of a listed French biotech corporation - fight allegations of insider trading brought by the French financial markets regulator, the Autorité des Marchés Financiers (AMF).

The AMF claimed that the major shareholder's sale of a large block of shares a few minutes before the biotech corporation's release of allegedly disappointing half-year earnings constituted insider trading. Analysis Group prepared a report for the defendant, noting that academic literature agrees that what would be considered "disappointing" earnings in a regular industry is not relevant for biotech startups. The Analysis Group team's report demonstrated that historical earnings announcements by the biotech corporation had no material impact on its stock price, and that the negative stock returns observed subsequent to the announcement by the biotech corporation were unrelated to this announcement.

The AMF Rapporteur, designated amongst the AMF Enforcement Committee members to investigate the matter, agreed with Analysis Group's conclusion and recommended that the major shareholder should be cleared of any wrongdoing. The AMF Enforcement Committee followed the AMF Rapporteur's recommendation.


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