France Probes Insider Ring Accused of Grooming Elite Students for Secrets
A secret €2 billion Christian Dior deal is at the center of an investigation into a network that allegedly cultivated young bankers as future sources.
French authorities are investigating a network that allegedly targeted students at top universities and junior bankers, betting they would one day land senior roles in finance and provide market-moving information.
At the heart of the probe is a former student who later worked at Rothschild on a secret €2 billion plan by billionaire Bernard Arnault to take Christian Dior private. While the deal was never publicly announced, it triggered suspicious trading in Paris, Dubai, and New York, according to confidential investigation documents cited by Bloomberg.
Authorities allege the relationship between the alleged tipster and the network that recruited him began years earlier while he was a student at HEC Paris, one of France’s most prestigious business schools. The group reportedly offered him housing assistance, career advice, and even recommendations on his appearance. Investigators believe they were cultivating a future “source” of information.
The Dior case stands out for the early stage at which the recruitment efforts allegedly began, long before the targets had access to confidential information. French authorities claim the same networks approached a graduate intern in France and at least four other young executives at Rothschild, JPMorgan Chase, Lazard, and HSBC Holdings between 2016 and 2018.
According to the authorities, all of them appear to have refused to provide inside information. The Autorité des Marchés Financiers (AMF), which launched the Dior investigation about five years ago, stated that employees at investment firms, law firms, M&A departments, and even IT departments of listed companies were particularly exposed.
French authorities also allege the tipster may have shared details of a takeover deal that is under investigation in the U.S. as part of a crackdown on a transnational insider-trading network, which allegedly secured more than $17 million in illegal profits.
The alleged informant left Rothschild about five years ago but remains in the financial industry as the case proceeds without charges being filed or a trial date set. Through a lawyer, he has denied any wrongdoing but declined to comment further.
In an email, Rothschild stated it “never had knowledge of such alleged conduct during his employment.”
French authorities have traced some suspicious trades in Dior stock to individuals and entities connected to the group of four who allegedly recruited the informant in France. Other transactions led investigators to two relatives linked to a separate insider trading case. Audio messages reportedly show they attempted, and failed, to influence Dior’s share price by leaking information about the deal to journalists.
