Peter Boone, the economist accused of profiting from a sharp rise in bond interest rates after writing a corrusticating 2010 blog in the New York Times, is to sue the Portuguese State for "trying to silence its critics."
"Dr. Boone is now preparing to sue the Portuguese State for a grossly incompetent and negligent investigation conducted by the Securities Market Commission (CMVM) and the Public Prosecutor's Office," reads part of a statement from Boone’s legal team.
Peter Boone and Simon Johnson, a former chief economist of the IMF, wrote on the Economix blog of the New York Times in April 2010 that after Greece applied for a bailout, that Portugal would follow and ran the risk of bankruptcy and default, claiming that Portugal would be "the next global problem.”
At the time, the Minister of Finance, Fernando Teixeira dos Santos, sent a note to the newsrooms, referring to "nonsense without solid foundation,” calling the authors ‘ignorant.’
The Portuguese market regulator concluded that the blog was "exaggerated and partial" in considering that Portugal would be the next to need financial assistance and later accused Peter Boone of "trying to manipulate the market".
This is because, after the publication of the article, the interest rate on 10-year Portuguese bonds began to rise sharply, from 4.395% to a 6.285%: a performance caused by the fall in the bond price, with which Peter Boone achieved a gain of €819,099.82.
In response to Boone's dire forecasts for the Portuguese economy, the Securities Market Commission opened an investigation on the grounds that the article aimed to devalue the price of Portuguese bonds.
Boone was linked to Salute Capital Management, a company that provided advice on investment in Portuguese public debt.
In October 2016, the Criminal Investigation Court dismissed the charges against Boone and the Public Prosecutor appealed against that decision a month later.
More recently, on June 21, the Court of Appeal upheld the decision of the lower court and, on July 12, the decision of the Court of Appeal of Lisbon became final, according to the economist's legal team.
"It is a tragedy for Portugal that prosecutors consider it appropriate to use State institutions to fabricate cases against critics rather than focus their efforts on preventing the cost of the financial crises that emerged under their eyes," said Peter Boone.
The Harvard economist maintains the prosecution was an attack on freedom of expression, "The Court of Appeal's verdict makes it clear that the Public Prosecutor's Office has attempted, illegally, to extend the crime of debt manipulation beyond its legal framework in order to devise a more efficient tool for silencing critics."
