Ljubljana – The Ljubljana Higher Court has rejected the ruling of the Ljubljana Local Court giving Kristjan Verbič, the president of the Pan-Slovenian Association of Small Shareholders (VZMD), a suspended prison sentence for insider trading in 2007. The decision is final and the proceedings against Verbič have been concluded, the VZMD said on Thursday.
Verbič was found guilty of insider trading involving the shares of Velana, a maker of textiles, in September 2016, and was to return the EUR 14,000 he allegedly gained through the sale of Velana shares after their price skyrocketed.
Verbič bought a significant holding of Velana stock just days before a public announcement about a shareholders’ agreement in September 2007 that sent Velana shares soaring. He later sold the shares at a multiple of the purchase price.
Verbič had denied the charges all along but the Ljubljana Local Court arrived to the same conclusion in the retrial as in 2016.
The Securities Market Agency was not aware of any suspected misdeeds until 2010, when the VZMD published a video on YouTube in which Verbič admitted to having worked to raise the share price. The video triggered the investigation.
After the Ljubljana Higher Court upheld an eight-month suspended sentence with a probation period of two years for Verbič, he turned to the Supreme Court, which annulled the ruling and ordered a retrial after the defence appealed on a point of law.
Verbič was again sentenced at the first instance last October, but the Ljubljana Higher Court rejected the sentence at the end of January, the VZMD said.
The association said that “insider information cannot be abused if the relevant information had previously been published in various media.”
It added that before Verbič had purchased Velana shares, he had publicly noted in the media the share being underappreciated, pointing to the difference between the price on the stock exchange and the actual price of Velana share.
“Despite these well-known facts, the prosecution has maintained for ten years that the VZMD president abused inside information,” the VZMD said, noting that Verbič had faced strong pressure from large shareholders on many occasions.