Lisbon District Prosecutor's Office has demanded that Canadian academic Peter Boone be tried for writing articles that predicted and helped trigger Portugal’s debt crisis and which bagged him over UDS800,000 due to subsequent shifts in bond prices.
Boone’s lawyers say their client denies any wrongdoing and ask for the Portuguese prosecutors to drop the case, adding that just because their client had an opinion that turned out to be correct, he is not guilty of a crime.
Portuguese bonds started to peak from April 2010 and later forced the Sócrates government to go for an international bailout as the cost of government finance had become unrealistic, hitting highs of over 17% in January 2012.
The Lisbon District Prosecutor's Office claims that Boone is guilty of market manipulation and wants a judge to review the allegations, a necessary step before any trial.
The prosecution claims to have evidence that Boone made a profit by talking up the bond interest rates with his comparison of Portugal to Greece which was in a worse economic state.
‘The Next Global Problem: Portugal,’ was published in April 2010 on a blog on The New York Times' website along with other damaging pieces in a similar vein without Boone admitting he was on the board of a company that provided investment services to a large hedge fund that dealt in Portuguese government bonds. This, Boone’s lawyers deny.
The academic turned businessman already has made himself available to Portuguese prosecutors to counter their claims and, along with co-author Simon Johnson, say the assertions are ridiculous.
See also:
'Harvard professor cleared of rigging Portuguese debt'
http://algarvedailynews.com/news/10082-harvard-professor-cleared-of-rigging-portuguese-debt
Comments
Are there any major international banks that haven't been censured for the same kind of activity?
So many Portuguese are so blinkered they do not remember that the US banking regulator had, for example, already censured BES for money laundering using fake or inadequate ID checks as far back as 2003.
And Portuguese banks were already crashing due to money laundering and fraud investigations in this period. So there was a lot to be digesting for investors to be doing and - without obvious effective regulation of the Portuguese banks and Portuguese stock market - no way for the money markets to know if they were getting anything like the reality. So they priced in the risk of not knowing.
As they will shortly be doing again due to the current political impasse.
Any the nonsense about him being on the board of a "large hedge fund that dealt in Portuguese government bonds" being an issue likewise absurd. Many fund managers across the western world will have dabbled in Portuguese government bonds from time to time and, at that time, will have sensed blood as Portuguese bonds began climbing higher than the average of the eurozone others.
A few phone calls to insiders and ..... bingo.