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French Supreme Court endorses the imposition of both AMF and criminal sanctions for same market manipulation event: French Supreme Court, 22 January 2014, No 12-83579

The French Supreme Court has held that the imposition of a criminal sanction, following an administrative sanction by the Enforcement Committee of the AMF (Autorité des marchés financiers), relating to the same market manipulation event is not contrary to Article 50 of the Charter of Fundamental Rights of the European Union (the Charter) or the non bis in idem principle.

The case relates to the market manipulation by Mr X, one of the shareholders of a company named Fromageries Paul Renard (FPR) specialising in the production and sale of cheese and milk. The AMF found that Mr X distorted the market, by multiplying transactions with the effect of misleading investors, and ordered him to pay a fine of EUR 250,000. Subsequently, the Public Prosecutor initiated criminal proceedings against Mr X on the basis of the same acts. The Paris Criminal Court and the Paris Court of Appeal found Mr X guilty of the criminal offence of market manipulation and sentenced him to a three month suspended prison sentence.

Before the French Supreme Court, Mr X raised the argument that the administrative penalty was criminal in nature. He argued that he had therefore already been tried by the AMF for the same offence and that this was contrary to the non bis in idem principle.

The French Supreme Court did not deny that the administrative and criminal sanctions were both concerned with the same conduct (ie market abuse by Mr X) but upheld the decision of the Court of Appeal. Although article 50 of the Charter provides that "no one shall be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law", the French Supreme Court held that an individual can be first sanctioned by the AMF and then prosecuted and found guilty of a criminal offence by a court for the same acts. This is subject to the cumulative sanction not exceeding the maximum possible sanction under either regime. The Court relied on:

  • Article 52 of the Charter pursuant to which "limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union"; and
  • Article 14-1 of Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation, which states that Member States must ensure that administrative sanctions are effective, proportionate and dissuasive.

This ruling is supported by recent case-law of the European Court of Justice (ECJ) in the case Aklagaren v Hans Akerberg Fransson (C-617/10) where the ECJ stated that the non bis idem principle does not preclude a Member State from imposing successively, for the same acts, a tax penalty and a criminal penalty "in so far as the first penalty is not criminal in nature, a matter which is for the national court to determine".

However, it should be noted that the ECJ stressed that the two sanctions should not be criminal, a requirement that was not clearly repeated by the French Supreme Court. Consequently, it remains unclear whether the French Supreme Court jurisprudence is in line with the ECJ jurisprudence. In the present case, even if the AMF sanction is considered to be administrative under French law, its repressive and preventative nature and the degree of severity are clearly oriented in favour of a criminal categorisation.1

A breach of the non bis in idem principle could still be raised before the European Court of Human Rights (ECHR). In a recent judgment relating to market manipulation (Grande Stevens & ors v Italy on 4 March 2014) the ECHR condemned Italy for violation of Article 4 of Protocol No 7 to the European Convention on Human Rights (the Protocol) because two sanctions had been imposed on an investor, first by the Italian Company and Stock Exchange Commission, then by a criminal court.

The ECHR considered that the reservation made by the Italian government to the Protocol whereby the non bis in idem principle laid down in Article 4 was not applicable to sanctions, proceedings and decisions classified as "criminal" by Italian law (which is very similar to the reservation made by France), was invalid. It clearly stated that Italy violated the Protocol since, despite the official administrative nature of the sanction under Italian law, the two sanctions were criminal in nature and based on the same acts.

The ECHR's interpretation of the scope of the non bis in idem principle clearly condemns France and other European countries which have allowed successive administrative and criminal proceedings for stock market offences. In light of this recent French Supreme Court decision, there is a great risk that the French jurisprudence will be held to be contrary to the European Convention on Human Rights by the ECHR.


1. The criteria were first set out by the ECHR in the case Engel & ors v The Netherlands of 8 June 1976 (5100/71) and subsequently applied by the ECJ.

Western Europe