I OVERVIEW

i Sources of law

For decades now, French securities laws have been adopted pursuant to, or modified in accordance with, European directives or regulations.2 In 1989, the EU adopted the Insider Dealing Directive, which obliged EU Member States to prohibit insider trading and to designate and empower an administrative authority to enforce the prohibition. In 2003, the EU went a step further by adopting the Market Abuse Directive (MAD), which, in addition to insider trading, prohibits ‘market manipulation’.3 The MAD was replaced in July 2016 by the Market Abuse Regulation (MAR), which extends its prohibitions to non-regulated markets and imposes minimum levels of applicable fines.4 In addition, pursuant to a new Market Abuse Directive (MAD II),5 all EU Member States had to make insider trading and market manipulation a criminal offence, before July 2016.

The EU also adopted a number of other directives that are relevant to securities litigation, notably the Prospectus Directive,6 the Transparency Directive,7 the Takeover Directive8 and the Directive on Markets in Financial Instruments (MiFID).9 The latter is about to be replaced by a new Directive and a Regulation on Markets in Financial Instruments (MiFID II and MiFIR),10 which were adopted in May 2014 for the purpose of making financial markets more efficient, resilient and transparent.

Finally, the European Court of Justice (ECJ) has jurisdiction to interpret these rules by issuing preliminary rulings, if requested by national courts.

Although EU law obviously forms much of the relevant French law and regulation, French law continues to have its particularities. Most provisions of those directives have been implemented under French law in the Financial and Monetary Code and in the General Regulation of the French stock markets regulator, the Financial Markets Authority (AMF). Decisions of the AMF Enforcement Committee and court precedents are also a significant source of law. Finally, legal doctrine tends to play a more significant role than in other jurisdictions.

Pursuant to the MAR, any person11 qualifies as an insider as soon as they possess ‘inside information’, namely information relating to one or more issuers or to one or more financial instruments12 that are precise,13 non-public and likely to have a significant effect on the price of those financial instruments or related derivatives. Insiders are prohibited from using14 that information by acquiring or disposing of (or by trying to acquire or dispose of) the relevant securities or related derivatives, on their own account or on behalf of a third party, either directly or indirectly. They are also prohibited from disclosing the information to any person (except for legitimate professional purposes) as well as from recommending or inducing any person to trade on the relevant securities.15

The prohibition of ‘market manipulation’ is twofold. It includes share price manipulation, namely transactions or orders to trade that give false or misleading signals as to the supply of, demand for, or price of listed securities, or that secure their price at an abnormal or artificial level, as well as transactions or orders to trade that employ fictitious devices or any other form of deception or contrivance. It also includes the dissemination of false or misleading information with respect to listed securities by any person who knew (or should have known) that the information was false.16

European regulation and French law impose extensive disclosure obligations on issuers and their representatives, be it upon the issuance of securities or afterwards, and a duty to make sure that all information they release is accurate, precise and fair.17 In addition to periodic financial disclosure requirements, the issuers have to immediately disclose to the market any inside information (as defined above)18 relating to their own securities; they may, however, delay disclosure to avoid prejudicing their legitimate interests, if the delay is not likely to mislead the public and the issuer is able to ensure the confidentiality of the corresponding information.19 The AMF has recently issued guidelines to further specify those rules.20

The AMF General Regulation also obliges any person preparing a financial transaction relating to an issuer to immediately inform the market, unless the confidentiality of the information can be ensured.21

Holders of publicly traded securities (or related derivatives) have to disclose the crossing of certain ownership thresholds, calculated as percentages of the issuer’s share capital or voting rights.22 The crossing of the 30 per cent threshold triggers an obligation to file a public tender offer for 100 per cent of the share capital.23

ii Regulatory authorities

The AMF has been empowered by French statute to investigate market abuse and other infringements to its General Regulation, and impose financial penalties. It was created in 2003 as an independent administrative organisation run by a board of 16 members, a majority of whom are appointed based on their financial and legal expertise. The financial penalties are imposed by the independent Enforcement Committee of 12 members (four judges, six people appointed for their financial and legal expertise and two representatives of employees of the financial industry).

Insider trading and market manipulation are also criminal offences under French law.24 The definitions and scope of the criminal offences are similar to those of the administrative infringements. The Public Prosecutor for Financial Matters and the Paris Criminal Court have exclusive jurisdiction for such offences.25 The Prosecutor may initiate an investigation either spontaneously, based on a complaint by any person, or following the transmission by the AMF of its investigation report. The matter may then be referred to the Criminal Court for trial, which will be held before three judges and without a jury. Victims of the offence may participate in the trial and seek to be awarded damages.

For years, the French Constitutional Court has considered that the same persons could be fined by the stock market regulator (currently the AMF) and convicted for the same facts by the Paris Criminal Court. However, under the influence of the European Court of Human Rights,26 in March 2015, the French Constitutional Court overruled its earlier decision in this respect (see Section III.i, infra).27

iii Common securities claims

Under French law, any third party having suffered a loss as a result of a market abuse or other infringement of the AMF General Regulation (even if the infringement has not been investigated or fined by the AMF)28 has a right to be compensated by the person who committed the abuse.29 If a contract exists between them, the victim’s rights to indemnification will be governed by the contract unless the injury results in the contract (or its provisions regarding liability) being held null and void by a competent court.

Victims cannot be awarded damages by the AMF.30 They may either intervene in the criminal proceeding and seek damages in the trial (if any) or sue the infringing party before the civil courts. This second option, however, is facilitated by the infringement having been investigated by the AMF because the French procedural system does not allow for discovery and therefore makes it difficult for plaintiffs to prove their case in a civil court.

In the absence of any market abuse or other infringement of the AMF General Regulation, investors that have suffered a loss in relation to securities may also seek to be indemnified by their financial intermediary for breach of their duty to warn them about the risks associated with the security. This duty is highly dependent on the sophistication of the client and the damage incurred would, in any case, be considered on the basis of lost opportunity. For that kind of claim, a class action is available to the clients of the financial intermediary, since 2014.31

Finally, attorneys’ fee awards have, for a long time, been de minimis in France. Some courts have recently started awarding higher amounts, but they remain very variable from one case to another and are unrelated to the actual fees.

ii PRIVATE ENFORCEMENT

i Forms of action

As a preliminary remark, it should be mentioned that even if French courts have admitted that all forms of market abuse (including insider trading)32 may result in damages for investors, all case law relating to the indemnification of investors until now has related to the dissemination of false or misleading information. Consequently, we focus on that particular infringement in this Section.

Victims of market abuse have two main procedural routes to prove their case and seek indemnification. They may participate in the criminal proceeding and the Paris Criminal Court can rule on both the criminal conviction and the damages to be awarded to any person having incurred a loss directly resulting from the offence (see Section III, infra).

Victims can also initiate civil action to recover damages, especially from the persons that were held responsible for an infringement by the AMF.

It is too early to tell whether or not civil market abuse claims will be facilitated by the recent statutory provision allowing the AMF to transmit upon request its investigation report to a civil court before which an indemnification claim is pending.33 The AMF’s investigation report may indeed allow investors to be indemnified by executives or third parties (or even the issuer itself) that were investigated, but not fined by the AMF. They could allege, for example, that the standard applicable to a breach of duty in a civil lawsuit is less stringent (mere negligence would suffice) than in a market abuse case (which requires violation, be it intentional or not, of applicable laws and regulations).

Even without access to its investigation file, the consequences of the AMF’s decisions can go beyond the persons fined for market abuse. For instance, a civil court ordered an issuer to indemnify investors because it resulted from a decision of the stock markets regulator that the issuer was in possession of (positive) material non-public information when making the (pessimistic) press release that had led the investors to sell their shares.34 In another case, plaintiffs have successfully claimed damages against several directors of the issuer even though only the CEO had been fined by the AMF.35

If the infringement is attributable to the issuer, investors may initiate action against the issuer or its officers or directors, who can be held responsible for the infringement. The issuer itself may also seek to receive damages from its (former) management, either for its own direct loss (such as a reputational loss) or from the damages paid by the issuer to plaintiffs (recourse action);36 such an action may be initiated either by the issuer’s (new) officers, or by its shareholders exercising a derivative action on behalf of the issuer.

The dissemination of false or misleading information may also be attributable to persons other than the issuer or its officers, either because those persons were involved in, and have contributed to, the dissemination of false or misleading information by an issuer (such as auditors) or because they acted independently (analysts, journalists, bloggers, or any other person). Investors in the affected securities and the issuer may seek to be indemnified from those persons.

There is still no class action available with respect to market abuse cases37 despite long-standing lobbying to this effect, including by the AMF itself.38 Therefore, shareholders have to act individually, either alone or along with other investors. However, the Financial and Monetary Code39 allows certain associations to claim damages for a market abuse infringement on behalf of the investors by whom they have been appointed for that purpose. These associations may not advertise, in any manner, their action and solicit additional mandates, unless authorised to do so by a judicial order.40 In addition, when several shareholders of a corporation act against its officers or directors, they are entitled to appoint one of them to act on their behalf.41

ii Procedure

The court will vary in nature and location; commercial or civil courts may have jurisdiction. In addition, the plaintiff may file its claim either before the courts situated where the defendant is domiciled (or has its headquarters), where the infringement took place or where the loss was incurred.

In French civil proceedings, each party has to prove its case based on the documents available to it, with limited access to documents in the other parties’ possession. Even though the judge is theoretically entitled to order that the parties produce any document relevant to the case,42 in practice, he or she will only rarely do so. The most efficient tool to obtain documents in the possession of the other party is to initiate a specific proceeding for the sole purpose of collecting evidence in view of a future claim.43 The proceeding has to take place before filing the indemnification claim and, if successful, will typically lead to the appointment of a bailiff entitled to access the defendant’s premises and collect relevant documents.

French civil proceedings rarely rely on witnesses’ written statements or oral testimonies. Therefore, the procedure will essentially allow the parties to exchange written pleadings and pieces of evidence, and, in the end, present their argument orally before the court. A standard first instance proceeding lasts for 18–24 months. An appeal would last approximately the same, with the court of appeal reviewing the whole case, both from a factual and legal point of view. In the event of a second appeal, the Supreme Court would rule on the legal aspects of the case only, within approximately 18–24 months.

iii Settlements

Even though the court may suggest that the parties attempt to find an amicable solution, and even organise (with the parties’ agreement) mediation or conciliation, the settlement of a civil claim does not require any judicial involvement or review. The only specific requirement for a valid settlement under French law is that it provides for mutual concessions.

iv Damages and remedies

Though case law was initially unclear regarding this issue, it now considers that the only consequence of a dissemination of false or misleading information is a loss of opportunity for the investors to make a better investment.44 As a result, the indemnity awarded to the investors will only represent a portion of their damage. In addition, instead of assessing the loss of opportunity on a case-by-case basis, French courts tend to award the same indemnity per share to all claimants45 or to broad categories of claimants.46

This approach has been widely criticised, essentially because dissemination of false information only results in a loss of opportunity in specific circumstances (e.g., when the investor actually made an investment choice taking the false information into account). The same commentators further argue that investors having invested in the securities between the dissemination of false positive information and the corrective statement (or having divested in the same period in the case of false negative information) incurred a certain and direct loss, which should be entirely indemnified. According to those commentators, that loss is equal to the effect that the information had on the share price, which can be precisely quantified through an event study.47

iii PUBLIC ENFORCEMENT

i Forms of action

The AMF has broad powers to supervise the stock markets and to investigate any related suspicious activities. Based on its findings, it may enjoin the relevant person from violating applicable laws and regulations.48 In the context of market abuse, however, the most common form of action is for the AMF to intervene after the fact by initiating a sanction procedure, as further described below.

For years, the same persons could be fined by the stock market regulator (currently the AMF) and also be convicted for the same facts by the Paris Criminal Court. The corresponding provisions, however, have been amended as a result of the French Constitutional Court decision of 18 March 201549 finding that double public enforcement of insider-trading laws against the same person for the same facts was unconstitutional.

After several consultations on this topic, Parliament adopted new legislation,50 according to which the AMF is entitled to pursue a market abuse case only if the Public Prosecutor for Financial Matters does not, and vice versa.51 In the event of disagreement between them, the Public Prosecutor of the Paris Court of Appeal has full discretion to attribute the case to either one or the other.

ii Procedure

Investigations of any matter within the AMF’s jurisdiction are opened by the AMF’s Secretary General. The appointed investigators have extensive powers: they can request the communication of any relevant document including phone usage data, convene all relevant persons for interview, access professional premises and conduct interviews on site. If authorised by a judiciary order, they may access non-professional premises on which they can conduct interviews and they can seize relevant documents on any premises. At the end of their investigation, the AMF sends a draft report and a draft statement of objections, on which the investigated parties then have one month to comment. Based on these comments and the final investigation report, the AMF’s Board decides whether to initiate a sanction procedure.

If a sanction procedure is initiated, the AMF’s Board sends to respondents a statement of objections, on which they have two months to comment. The Board also transfers the file to the AMF’s Enforcement Committee, which appoints one of its members as rapporteur. The rapporteur will review the case, conduct further investigation, if needed, and opine on the merits of the objections in a report, on which respondents have 15 days to comment. After a hearing during which the rapporteur, a representative of the AMF’s Board and the respondents will present their oral arguments, the AMF’s Enforcement Committee will rule on the case.

Its decision may be appealed before the Paris Court of Appeal or the French Administrative Supreme Court, depending on whether or not the respondents are professionals of the finance industry working under the AMF’s supervision. The ruling of the Paris Court of Appeal may be appealed before the Supreme Court. The whole proceeding before the AMF (including the investigation phase) lasts for between two and four years. Each appeal takes 18–24 months.

As for the Public Prosecutor for Financial Matters, it has full discretion to initiate a preliminary investigation and to transmit the file to an investigating magistrate.52 Both the Prosecutor and the investigating magistrate have the same powers as in any criminal case, including access to premises, seizure of documents, and conduct of interviews. If the investigating magistrate considers that there is enough evidence, he will refer the prosecuted parties for trial before the Paris Criminal Court. At the hearing, the Court53 will conduct a full review of the case, possibly involving experts and fact witnesses.

As opposed to the AMF sanction procedure, the criminal prosecution allows the victims of the offence to participate. They have access to the file as soon as an investigating judge is appointed with a right to ask for additional investigation and to challenge the investigating magistrate’s decisions. In the event of trial, the victims will participate in the trial and be entitled to submit written as well as oral pleadings.

iii Settlements

Until recently, only disciplinary proceedings (i.e., involving financial industry professionals) could be settled with the AMF. Law No. 2016-819 of 21 June 2016 has extended the scope of the AMF settlement procedure to all infringements falling within the AMF’s jurisdiction, such as the breach by issuers or shareholders of transparency requirements, and including market abuse (see Section VI, infra).

Even if settlement of criminal cases is theoretically possible under French law,54 it remains exceptional in practice. A settlement with the victims of the offence is always possible; however, it will only deal with civil damages and avoid any further involvement of the victims. Such a settlement will not prevent the prosecution from being continued, and the trial from being held, if the Public Prosecutor or the investigating judge deems it appropriate.

iv Sentencing and liability

The AMF is entitled to impose financial penalties of up to the higher of: (1) €100 million, (2) 10 times the profit resulting from the infringement, or (3) 15 per cent of the defendant’s consolidated turnover (if applicable).55 It may also impose other types of sanctions (such as a warning or a prohibition on conducting certain businesses) on the professionals of the financial industry acting under its supervision. The amount of the fine is based on (inter alia) the seriousness of the infringement and the advantages obtained or profits gained by the infringing party. The decision is made public, unless its publication may significantly disturb the financial markets or harm the infringing parties.56

The Paris Criminal Court can impose fines of at least the amount of the profit resulting from the offence (if any) and up to the higher of: (1) €100 million,57 (2) 10 times the profit resulting from the infringement, or (3) 15 per cent of the defendant’s consolidated turnover (if applicable), and imprisonment for up to five years.58 This applies to insider trading as well as market manipulation.59

iv CROSS-BORDER ISSUES

In relation to securities admitted to trading on a French multilateral trading facility (or other securities not admitted to trading on such markets, but the value of which depends on those securities), the AMF has jurisdiction for all market abuse infringements, even if entirely committed outside France. In relation to securities admitted to trading on a regulated market in an EU/EEA Member State (other than France), the AMF has jurisdiction for all market abuse infringements committed in France.60

As for criminal proceedings, the Paris Criminal Court has jurisdiction and French criminal law applies as long as the offence was entirely or partially committed in France, even in relation to securities of a foreign issuer that are not listed in France.61 The same would be true for an offence entirely committed outside France, if the victim was a French national at the time.62

In international civil cases, the court having jurisdiction and the applicable law will depend on the applicable international conventions. In a case involving several EU Member States, EU Regulation 1215/2012 will allow plaintiffs, if they are able to demonstrate that the infringement took place in France, to file a complaint before French courts. Against a defendant outside the EU, in the absence of any convention to the contrary, plaintiffs will be entitled to seek indemnification (on a non-contractual basis) before a French court if the infringement or the resulting loss took place in France.63 In both cases, EU Regulation 864/2007 will trigger application of French law if the loss was incurred in France.

v YEAR IN REVIEW

Apart from a few adjustments due to the entry into force of MAR and MAD II, the main change in the enforcement of market abuse resulted from Law No. 2016-819 of 21 June 2016, which adopted a mechanism designed to avoid double public enforcement of market abuse laws against the same person for the same facts (see Section III.i, supra). According to the AMF, 18 matters were in the process of being allocated between the AMF and the Public Prosecutor for Financial Matters as of 1 December 2016.64

Even though a clear improvement, the mechanism raises some questions regarding its application. The law provides for a dialogue between the AMF and the Public Prosecutor for Financial Matters to determine which of them will prosecute the case, without any criteria as to how this determination should be made. In the event of a disagreement, the decision is made by the Public Prosecutor of the Paris Court of Appeal, again with no indication of the corresponding criteria. This process does not involve the defendant and does not allow for any appeal or challenge.

The choice of an enforcement before the Paris Criminal Court or before the AMF can have significant consequences for the defendant, who faces up to five years of imprisonment only before the Paris Criminal Court. Therefore, this mechanism has been criticised and may in the future be challenged on the basis of constitutional or international law arguments. It could be argued, for example, that it does not comply with the requirement of equal treatment or the principle of legality (which imposes the predictability of the law).

vi OUTLOOK AND CONCLUSIONS

The scope of the settlement with the AMF was extended to market abuse in 2016 (see Section III.iii, supra).

Since it was introduced under French law in 2010 for disciplinary proceedings (i.e., involving financial industry professionals), the settlement with the AMF has proved to be an efficient alternative to the enforcement by the Enforcement Committee of the AMF. In fact, half of those proceedings have been settled.

The main criterion for the AMF when deciding to propose a settlement is the existence of similar precedents. The settlement procedure is fast (generally completed within seven months, as from completion of the investigation) and transparent (the settlement agreements are published on the AMF’s website). According to the AMF, defendants are also interested in this procedure because it doesn’t require the admission of guilt nor a public hearing.65

The settlement can also provide for an indemnification of the victims, as long as their loss can be precisely quantified. As an example, a settlement recently granted over €1 million to the benefit of the victims.66

One key factor of market abuse enforcement during the coming years will be the ability of the AMF to settle those cases as successfully as it has done other cases. It may prove more difficult to determine the appropriate fine as a result of market abuse cases being more diverse and the precedents accordingly less reliable.

1 Bertrand Cardi and Nicolas Mennesson are partners at Darrois Villey Maillot Brochier.

2 In accordance with the EU Treaties, directives set out general rules to be transferred into national law by each EU Member State as they deem appropriate, whereas regulations are directly applicable in all EU Member States.

3 Directive 2003/6/EC of 28 January 2003, as amended.

4 Regulation 596/2014 of 16 April 2014.

5 Directive 2014/57/EU of 16 April 2014.

6 Directive 2003/71/EC of 4 November 2003, as amended.

7 Directive 2004/109/EC of 15 December 2004, as amended.

8 Directive 2004/25/EC of 21 April 2004, as amended.

9 Directive 2004/39/EC of 21 April 2004, as amended.

10 MiFID II and MiFIR will enter into force on 3 January 2018.

11 Including persons having no relation whatsoever with the issuer who, for example, became aware of the information fortuitously. Those persons, however, are subject to the various prohibitions applicable to insiders only if they know, or ought to know, that it is inside information.

12 Pursuant to the MAR, market abuse applies to financial instruments (1) admitted to trading on a regulated market or for which a request for admission to trading on a regulated market has been made ; (2) traded on a multilateral trading facility (MTF), admitted to trading on a MTF or for which a request for admission to trading on a MTF has been made ; or (3) traded on an organised trading facility (OTF) (MAR, Article 2).

13 In accordance with the MAR, a piece of information is precise if, first, ‘it indicates a set of circumstances which exists or may reasonably be expected to come into existence or an event which has occurred or which may reasonably be expected to occur’ (MAR, Article 7.2). Second, it has to ‘enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices’. The ECJ has recently clarified this phrase by ruling that information may qualify as ‘precise’ under the MAD (and accordingly under the MAR) even if it does not allow someone to anticipate in what direction the share price will move upon disclosure to the market of the information (ECJ C-628/13, 11 March 2015, Jean-Bernard Lafonta v. AMF). Pursuant to the MAR, in the case of a protracted process intended to bring about a particular circumstance, not only may that future circumstance or future event be regarded as precise information, but also the intermediate steps of that process (MAR, Article 7.2).

14 The ECJ ruled that trading by an insider in the relevant securities ‘implies that that person has “used that information” within the meaning of that provision, but without prejudice to the rights of the defence and, in particular, to the right to be able to rebut that presumption’ (ECJ C-45/08, 23 December 2009, Spector Photo Group v. CBFA). In accordance with this ruling, the AMF now considers that no infringement is committed by insiders who did not unduly utilise the advantage that the information conferred to them (AMF Enforcement Committee, 11 February 2015, société IC Telecom et autres).

15 MAR, Article 14.

16 MAR, Article 12 et seq.

17 AMF General Regulation, Article 223-1.

18 In accordance with the MAR, the same definition of ‘inside information’ is used for the purpose of determining if the person in possession of such information is prohibited from trading and if the issuer has a duty to disclose it to the market. Pursuant to the Transparency Directive, Member States may, however, impose more stringent obligations on their issuers.

19 AMF General Regulation, Article 223-2.

20 MAR, Article 17; AMF, Guidelines on the permanent disclosure requirement and the management of inside information, October 2016.

21 AMF General Regulation, Article 223-6. In two instances, the AMF imposed fines based on this provision, even though the transaction had remained confidential (AMF Enforcement Committee, 13 December 2010 and 25 June 2013).

22 Articles L233-7 et seq. of the Commercial Code.

23 Article L433-3 of the Financial and Monetary Code.

24 Articles L465-1 and L 465-2 of the Financial and Monetary Code.

25 Article 705-1 of the Criminal Procedure Code.

26 In particular ECHR, 4 March 2014, Grande Stevens and Others v. Italy, 18640/10, 18647/10, 18663/10, 18668/10 and 18698/10.

27 French Constitutional Court, 18 March 2015, 2014-453/454 QPC and 2015-462 QPC.

28 Colmar Court of Appeal, 14 October 2003, 01/03432.

29 Article 1240 of the Civil Code.

30 However, as of 2016, the financial penalties imposed by the AMF can be increased by up to 10 per cent to fund the indemnification of victims (Article L621-15 of the Financial and Monetary Code).

31 Article L623-1 et seq. of the Consumer Code.

32 Criminal Chamber of the Supreme Court, 11 December 2002, 01-85176.

33 Article L621-12-1 of the Financial and Monetary Code.

34 Paris Court of Appeal, 26 September 2003, 2001/21885.

35 Commercial Chamber of the Supreme Court, 9 March 2010, 08-21547. In that case, however, the issuer had been declared bankrupt after an audit had revealed that its accounts were grossly inaccurate.

36 Actions brought against the issuer’s officers, either by the issuer or its shareholders, are subject to a specific statute of limitation of three years (indemnification claims are otherwise subject to a five-year statute of limitation). However, it has recently been ruled that in the event that the issuer exercises a recourse action against its officers or directors, the three-year period starts when the main indemnification claim is filed against the issuer (Commercial Chamber of the Supreme Court, 6 May 2014, 13-17632).

37 Class actions were only admitted under French law in 2014 and are available only to consumers against a professional having sold goods or provided services in breach of their legal duties, or violated antitrust laws.

38 AMF, Report on the indemnification of losses incurred by investors, 25 January 2011.

39 Article L452-2 et seq. of the Financial and Monetary Code.

40 Outside this legal framework, the solicitation of mandates by investors to initiate action on their behalf allows the court to consider the writ of summons null and void and therefore dismiss the claim, as it did in the proceeding initiated against Natixis by approximately 1,000 investors (Bobigny Commercial Court, 22 November 2011, RG 2010F01401).

41 Article R225-167 of the Commercial Code.

42 Article 138 et seq. of the Civil Procedure Code.

43 Article 145 of the Civil Procedure Code.

44 Commercial Chamber of the Supreme Court, 9 March 2010, 08-21547; 6 May 2014, 13-17632.

45 Paris Court of Appeal, 17 October 2008, 06/09036.

46 Paris Court of Appeal, 17 February 2015, 10/04697.

47 See, inter alia, ‘Assessment of the financial loss of investors in listed corporations’, Report of the Club des juristes, November 2014.

48 Article L621-14 of the Financial and Monetary Code.

49 French Constitutional Court, 18 March 2015, 2014-453/454 QPC and 2015-462 QPC.

50 Law No. 2016-819 reforming the market abuse enforcement system, 21 June 2016.

51 L465-3-6 of the Financial and Monetary Code.

52 The investigating magistrate is a judge in charge of reviewing all aspects of the case, theoretically both in favour of and against the prosecuted persons. The Prosecutor may also refer the matter directly to the Paris Criminal Court for trial. This is rarely the case in complex matters, but there are precedents of direct referrals in market abuse cases, which allowed the Paris Criminal Court to rule before the AMF (Salomon, ‘Le principe ne bis in idem et les infractions boursières’, JCPE No. 15, 9 April 2015, 1182).

53 Composed of three judges but no jury.

54 Articles 41-2 and 495-7 of the Criminal Procedure Code; article L465-3-6, X, of the Financial and Monetary Code.

55 Article L621-15 of the Financial and Monetary Code.

56 As a result, it is very difficult to avoid the decision of the AMF’s Enforcement Committee being made public; however, parties may make a submission that it be anonymised.

57 The fine amounts mentioned in this paragraph are the maximum fines that may be imposed on natural persons. For legal entities, the maximum fine referred to under (1) is €500 million.

58 Unconditional imprisonment of persons convicted for market abuse is rare in France. Indeed, to our knowledge, it has only happened in two cases.

59 Article L465-1 et seq. of the Financial and Monetary Code.

60 Article L621-15 of the Financial and Monetary Code and Article 611-1 of the AMF General Regulation.

61 Article 113-2 of the Criminal Code. This was confirmed in an insider-trading case relating to a US corporation (the shares of which were only listed in the United States) where the order to purchase shares had been made in France (Criminal Chamber of the Supreme Court, 3 November 1992, 92-84745).

62 Article 113-7 of the Criminal Code.

63 Article 46 of the Civil Procedure Code.

64 Sophie Baranger, ‘Le contentieux boursier: entre repression pénale et sanction administrative’, Symposium organised by the French Court of Cassation on 1 December 2016.

65 Anne Maréchal and Bertrand Legris, ‘La composition administrative de l’AMF: un premier bilan très positif’, Bulletin Joly Bourse (December 2016), p. 539 et seq.

66 Settlement agreement between the AMF and Iris Finance SA dated 30 November 2015.