A UBS employee overheard a conversation on a Eurostar train neighbor and found out about a $ 15 billion deal. Now he and the bank will be fined



    Image: Isriya Paireepairit | CC BY-NC 2.0

    In mid-July 2014, an employee of Lazard Ltd. Vincent Le Stradic traveled by train from London to Paris. He discussed with colleagues his upcoming deal - the purchase of the American provider of T-Mobile by the French company Iliad SA, owned by billionaire Xavier Niel.

    His neighbor was UBS banker Alexander Zaluski. He overheard Le Stradik's conversation, and passed information about a possible deal to his superiors. As a result, UBS offered Niel a loan to carry out the transaction.

    This did not like the management of financial markets in France - now, as writes Bloomberg, fines for the use of private information threaten both the UBS bank and its employee.

    Case details


    Le Stradik is one of the closest advisers to Xavier Niel. During the negotiations, while traveling on the Eurostar train, he used several smartphones. UBS employee Alexander Zaluski, who turned out to be his neighbor, was able to see several messages on the financier’s smartphone screen, and also heard his talk about the deal being prepared.

    Zaluski realized that a deal could be announced in two weeks. He could not fully understand the intentions of Niel and his company Iliad, so he contacted his colleague in the office, Christian Lesueur, who worked as head of telecom, media and technology in Europe, the Middle East and Africa.

    He quickly organized a team of 12 UBS bankers who developed a loan finance proposal for Iliad.

    Possible consequences


    Despite the fact that none of the participants in the story made financial transactions that could be recognized as insider trading, the French financial regulator plans to punish Zaluski and UBS. The reason is that the company and its employee used information that they should not have received.

    According to a representative of the French Financial Markets Authority, the agency recommends imposing a fine of 45 thousand euros on Zaluski and a fine of 400 thousand euros for his boss Christian Lezier. UBS Bank itself will have to pay a 1 million euro fine.

    Information about the investigation of the data leak appeared after it became known that the French authorities have brought charges against the chairman of Iliad Maxime Lombardini (Maxime Lombardini). He made stock deals with companies shortly before announcing that she had offered $ 15 billion for a controlling stake in T-Mobile US.

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