Bronfman convicted of insider trading

Edgar Bronfman Jr., Jean-Marie Messier and five other men were found guilty of criminal charges related to Vivendi SA's near-bankruptcy after a US$77 billion acquisition spree by a Paris court Friday.

Neither Messrs. Messier nor Bronfman will serve jail time under the suspended sentences handed down by a panel of judges. Messier was charged with misleading investors during his tenure as chief executive officer at Vivendi. Mr. Bronfman was charged with trading on confidential information while he was vice chairman of the company.

The conviction diverges from a civil jury verdict in New York in January, which cleared Mr. Messier and former chief financial officer Guillaume Hannezo of misleading investors, holding the company solely responsible for the conduct. Prosecutors in the French case had recommended that the judge find the men not guilty.

Mr. Messier received a three-year suspended sentence and Mr. Bronfman a 15-month suspended sentence at the hearing.

Mr. Messier nearly bankrupted the company, buying 23 businesses to transform the water utility, founded in the 1800s, into a multimedia conglomerate with the world's largest music company and video-game maker, as well as pay-television and telecommunications operations. He testified during the June trial that he made "mistakes" as CEO, while insisting that his strategy of uniting content and delivery was ultimately proven sound, just ill-timed.

Mr. Bronfman, chairman of Warner Music Group Corp. and Vivendi vice chairman from 2000 until 2003, was accused of improperly gaining US$12.8 million from exercising stock options based on non-public information about a planned share sale.

(Published by Financial Post - January 21, 2011)