FRANCE: AMF Fines Elliott Management for Failing to Comply with Reporting Obligations

Wednesday April 22 2020

On 22^nd April the AMF Enforcement Committee fined Elliott Advisors UK Limited and Elliott Capital Advisors L.P. for failing to comply with their reporting obligations in connection with a simplified public tender offer and, in the case of the former, for obstructing an AMF investigation.

In its decision of 17 April 2020, the Committee imposed fines of €15 million and €5 million on Elliott Advisors UK Limited and Elliott Capital Advisors L.P., managers of several investment funds. The Committee found that both companies had filed inaccurate and late reports in connection with the simplified public tender offer filed in 2015 by XPO for the shares of Norbert Dentressangle SA. It also found that Elliott Advisors UK Limited had obstructed the AMF’s investigation.

In April 2015, XPO announced its intention to launch a simplified public tender offer for a portion of Norbert Dentressangle SA shares. Between 8 May and 21 July 2015, Elliott Advisors UK Limited, acting on behalf of several Elliott funds, acquired shares and derivatives relating to the securities of Norbert Dentressangle SA through numerous market transactions during this period. On 21 July 2015, the AMF published the results of the offer, announcing that only 86.25 % of the capital of Norbert Dentressangle SA was held by XPO, with Elliott funds holding 9.18 % of the shares and 9.076 % of the voting rights in the company, thereby preventing the squeeze-out initially contemplated by XPO.

The Enforcement Committee found inaccuracies and delay in Elliott Capital Advisors L.P. reporting on behalf of Elliott funds, in connection with their acquisition of a stake in Norbert Dentressangle SA.

It first noted that, by reporting that the transactions at stake involved cash-settled CFDs when they actually involved equity swaps, the respondents had filed inaccurate reports on the nature of the financial instruments acquired as part of this investment.

The Committee then considered that Elliott Capital Advisors L.P. had not complied with its obligation to report its intention to tender the securities acquired to the offer, once the offer has been filed. The Committee found that it declared belatedly, on 10 July 2015, its intention not to tender the Norbert Dentressangle SA securities to the offer, while, at the beginning of the offer period, on 11 June 2015, Elliott funds held, by assimilation, more than 2% of Norbert Dentressangle SA shares and subsequently, on 18 June 2015, exceeded its 5% share ownership threshold.

The Enforcement Committee also found that Elliott Advisors UK Limited had obstructed the AMF’s investigation by providing lately and incompletely the information requested by the investigators. However, the Committee deemed that Elliott Capital Advisors L.P. had not obstructed the investigation.

In assessing the fines imposed on the respondents, the Enforcement Committee considered, among other elements, the following: first, the fact that the inaccurate reportings and the delay in submitting a declaration of intent to the AMF were intended to conceal from the market, for as long as possible, the strategy of blocking the squeeze-out offer in order to negotiate a reassessment of XPO’s offer price; and, second, the fact that Elliott Advisors UK Limited had already been fined €8 million by the Committee in 2014 in an insider trading case.

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