Topic Insider monitoring Suspended prison sentence for insider trading in securities of Ersol Solar Energy AG
On 13 November 2012, the Wiesbaden Regional Court (Landgericht Wiesbaden) sentenced an Austrian citizen to a suspended prison term of 18 months and a EUR 5,000 fine for insider trading in warrants on shares of Ersol Solar Energy AG. The conviction and sentencing resulted from an insider trading investigation by BaFin and an investigation by the Frankfurt public prosecutor's office and the Hessian Office of Criminal Investigation (Hessisches Landeskriminalamt).
The shares of the solar panel manufacturer Solar Energy AG are listed on the regulated market of the Frankfurt Stock Exchange. The insider trading took place in advance of the acquisition of the company; Robert Bosch GmbH had made a takeover bid public in early June 2008. The Ersol share price had hovered between EUR 50 and EUR 70 between January and May 2008, before it rose to just over EUR 100 following the takeover bid. A few days prior to the announcement of the takeover bid, the guilty party – a former long-time companion of a primary insider – used the entirety of his wealth to acquire approximately EUR 85,000 worth of call options on Ersol shares via securities accounts at various German and foreign credit institutions. He began selling off the calls on the day the takeover bid was made public, generating a total profit of approximately EUR 1 million.
The Wiesbaden Regional Court suspended proceedings against the co-defendant (primary insider) and ordered him to pay a fine in the amount of EUR 20,000 pursuant to section 153a of the German Code of Criminal Procedure (Strafprozessordnung – StPO). The damage amounting to approximately EUR 1 million suffered by the issuer of the warrants as a result of the insider trading was settled by the two defendants in the course of the investigation. Both had signed notarial confessions.
The ruling of the Wiesbaden Regional Court has legal force.