TJ Group managers cleared of nearly all charges

District Court: Mistakes in brochure did not affect share prices

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Helsinki District Court has acquitted the IT services company TJ Group and its directors of nearly all of the stock market violation charges presented against them. Charges against the TJ Group and its principal owners Jyrki Salminen and Tuomo Tilman included dissemination of information offences and aggravated violations against insider trading legislation. The offences allegedly took place in conjunction with the sale of the company’s stock in the spring of 2000.
      The State Prosecutor Ritva Sahavirta also raised charges against the share issue organiser Evli Bank Plc, the TJ Group’s Board of Directors at the time, and one employee in relation to several suspected security markets information offences, some of which she considered aggravated.
     
Ultimately only Salminen and Tilman were sentenced to 40 income-linked day fines for delaying the publication of a result warning in April 2000.
      The delaying of the result warning was just an incidental charge in the case, but the only one to bring a conviction. The Court ruled that the warning released on April 26th should have been given at the beginning of the month.
      Salminen and Tilman were fined EUR 7,400 and EUR 6,800 respectively. The State Prosecutor’s original demand was an unconditional prison sentence for both men.
      Also the demand of returning the enormous EUR 151 million profit that the company’s present and former directors had gained in conjunction with the 2000 stock issue was thrown out.
      From the TJ Group itself the prosecution demanded EUR 40 million, which in practice would have resulted in the company’s bankruptcy.
      Evli Bank was also acquitted of all charges. The bank thereby avoided paying the demanded EUR 100,000 fine, as did the TJ Group, which would have faced a fine of EUR 200,000.
     
A kind of domino effect caused most of the charges to be thrown out, after the District Court dismissed the primary charges of dissemination of misleading information in February 2000.
      Once the Court had decided the company and its directors had not committed a dissemination of information offence, nobody could be convicted of misuse of insider information either.
      The Court recognised that the business profit of EUR 79,000 announced to investors was in fact a loss of EUR 114,000. However, based of statements from expert witnesses, the Court also decided that those figures were immaterial for investors to base their decisions on "in that exceptional Internet age market situation".
      On Thursday, the State Prosecutor refrained from commenting whether it would appeal the decision.


Previously in HS International Edition:
  Court confiscates TJ Group owners' properties worth tens of millions of euros (10.2.2005)
  Police to investigate massive suspected insider trading case in TJ Group (28.1.2005)

Links:
  TJ Group press release: TJ Group's suspected security markets information offence in 2000 to be tried in court
  Evli Bank press release: Evli Bank acquitted in TJ Group trial

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