Bronfman fined in Vivendi insider trading case

By Associated Press
Posted Jan. 21 at 8:20 a.m.

A French court fined Warner Music Group Chairman and CEO Edgar Bronfman Jr. 5 million euro ($6.7 million) on Friday for misleading investors about the Vivendi media conglomerate when he was a top executive there.

The court also convicted former high-flying Vivendi CEO Jean-Marie Messier of misusing company funds and misleading investors and handed him a three-year suspended prison sentence.

Bronfman, a former executive vice president of Vivendi Universal, was convicted of “conveying false or misleading information” about Vivendi in 2000-2002 and “manipulating stock prices” in 2001. He was given a 15-month suspended sentence as well as the fine.

Messier was acquitted of charges that he manipulated Vivendi’s stock price during his leadership of the company. His conviction of misusing company funds related to a 20 million euro severance package he eventually renounced.

Two other former Vivendi executives, Eric Licoys and Guillaume Hannezo, were given suspended prison sentences. Three others on trial were acquitted.

The conviction came though the prosecutor had recommended acquittal after the high-profile Vivendi trial last year. She said the executives did not have enough information about the company’s health and didn’t dupe anyone.

Messier was a star of the French business world during his 1996-2002 reign at Vivendi, when the company expanded from the water utility Generale des Eaux into a major media group.

However, Vivendi’s shares lost more than 80 percent of their value as the company ran up billions of dollars of debt in making acquisitions including the Universal film studios and music label in the United States.

By the time Messier left, Vivendi Universal was swamped under 35 billion in debt — prompting the company to sell off many of its businesses, including Universal, to right itself.

Messier was sacked by Vivendi’s board of directors in 2002 and the company underwent drastic restructuring.

In a similar trial in New York, the U.S. District Court in Manhattan ruled a year ago against Vivendi SA and in favor of U.S. and European shareholders who said the media group lied to the public about its shaky finances. The court ruled that Messier himself was not liable.

Read more about the topics in this post: , ,

Companies in this article

Comments are closed.