Investment manager

Union Investment Manager admits insider trading in court

A senior portfolio manager at Union Investment admitted to having committed numerous insider trading during the Frankfurt court hearing on Wednesday.

According to Financial Time, the 45-year-old, who cannot be named, told judges he was frustrated with his € 440,000 salary in 2019 and “offended” by a smaller-than-expected salary increase.

The fund manager said another motivation was to make up for the heavy losses he suffered with his Wirecard investments.

It is understood that the investor was one of the driving forces behind the company’s decision to become one of the major shareholders of the payments company in 2020.

Union Investment recently filed a lawsuit against Wirecard after € 243million in losses because the asset manager wanted to make sure shareholders’ claims were not overlooked.

Commenting on his insider trading activities, the defendant said initially that he was only aiming to earn some € 500,000 from his side investments.

According to the court report, he said: “Things got out of hand then. It has become an addiction. Every successful trade has generated a feeling of elation and superiority.

He said the profits were never spent because he “had no idea what the money was used for.”

The fund manager worked for Union Investment for 16 years and oversaw € 31 billion in assets before being suspended from his duties following allegations of insider trading in September 2020.

He admitted he was leading the investment decision he made on behalf of Union Investment 55 times between April and September last year, making a profit of € 8.1m .

The fund manager currently faces up to five years in prison, with prosecutors saying they would seek more than four years.

In December 2020, Hans Joachim Reinke, CEO of Union Investment, addressed the press. In an interview with Handelsblatt, Reinke said that Union Investment was not to blame and that BaFin was satisfied with the internal control system and the cooperation with the company.


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