Interrupting A French Connection

France is tackling white-collar crime with a case involving millions of euros in profits.

- Gaspard Sebag

It was a busy Thursday, and Stephane Fima was on edge. After wrapping up a conference call with colleagues, the Société Générale SA managing director rang his friend Thomas Seligman. Fima stammered that he was worried and wanted “to stay safe,” then started reading a series of seemingly random figures. “Just write them down,” the banker said, before asking Seligman if he had another phone.

“This one is safest,” replied a perplexed Seligman. “We haven’t used it in eight months.”

“Fine, I’ll call back in five minutes,” Fima said. Neither of them knew it, but police were listening to those November 2015 phone calls. French authorities had been seeking evidence in a sprawling inquiry into suspicious trades in more than a dozen securities, including ad agency Publicis Groupe, automaker Peugeot, and cement producer Lafarge.

The investigation, France’s biggest-ever probe of insider trading, marks a major departure in a country where the offense has typically been dealt with as if it were a civil violation. With a handful of exceptions, authorities haven’t aggressively pursued such cases and have had scant success when they’ve taken them to court.

French authorities are aiming to improve on that record in the case involving Seligman and Fima, more than a decade in the making. Since 2007, France’s Autorité des Marchés Financiers had seen suspicious trades in the days before merger announcements or corporate profit warnings, with one suspect in 2014 reaping €20 million ($23 million) from a single tipoff. The central question: Who was providing the information?

This story is based on court documents, a transcript of wiretaps obtained by Bloomberg, and dozens of conversations with people involved in the probe who have asked not to be identified because details of the case remain confidential.