Three executives of the bust Banco Espírito Santo - António Leandro Soares, Pedro Cohen Serra and Nuno Morgado Escudeiro - have been found guilty of buying and selling EDP stock in January 2008 just before the company announced it was hiving off EDP Renewables which causes a sharp rise in the EDP share price.
The Portuguese Securities Market Commission (CMVM) was alerted as the shares traded by the trio represented more than 0.5% of EDP’s share capital.
The purchase of shares was made during the days before the EDP announcement and the sale of shares was made shortly afterwards, bagging a profit of around €10 million.
Besides BES having a qualified holding in EDP, BES Investments was advising on the spin-off of EDP Renewables, so BES Group executives had inside information and the three executives took full advantage.
In July 2014, the Department of Investigation and Penal Action in Lisbon accused the three BES executives and filed an action against Amílcar Morais Pires, the former BES finance director and José Maria Ricciardi, the BES director and president of BES Investments.
The three executives at first were acquitted but have been found guilty on appeal. The case now goes back to the lower court for sentencing with the defendants still able to appeal to the Constitutional Court.
