Introduction

Matrix organization

Mergers by absorption

Risks related to the expansion of the scope of criminal liability of legal entities

Validity conditions

Proof of delegation

Exemption from individual liability of delegator

Attribution of offense to legal entity

Delegations of authority

Criminal risk management within business organizations

Complicity in crimes against humanity

Breaches of secrecy

Personal data breaches

Theft

Extortion

Blackmail

Fraud

Misappropriation

Receiving/concealment of unlawfully obtained property (recel)

Attacks on automated data processing systems

Money laundering

Misappropriation by public official (concussion)

Corruption and influence peddling

Unlawful acquisition of an interest

Favoritism

Forgery and use of forgeries

Violation of Criminal Code

Offenses under the Monetary and Financial Code

Offenses under the Commercial Code

Environmental Code violations

Offenses arising from other codes

Types of offenses

Offenses under the Criminal Code, the Commercial Code, or the Environmental Code, Criminal procedure

White Collar Crime (en cours)

Article L. 465-1 of the Monetary and Financial Code prohibits the use, by its holder, of inside information (information privilégiée), either by carrying out a stock market transaction or by canceling or modifying orders placed . The possession of inside information allows the user to conduct transactions without being exposed to the same risks as other market participants, thus undermining the in …

Use of inside information

Article L. 465-1 of the Monetary and Financial Code prohibits the use, by its holder, of inside information (information privilégiée), either by carrying out a stock market transaction or by canceling or modifying orders placed . The possession of inside information allows the user to conduct transactions without being exposed to the same risks as other market participants, thus undermining the integrity of the market and investor confidence . However, the mere fact that a person possesses inside  information does not constitute insider trading if the transactions concerning the financial instruments related to this information are carried out legitimately (Art. L. 465-1, B), that is, within the normal scope of their function or profession and in accordance with accepted market practices .

Insider dealing is a formal offense (infraction formelle), i.e. it does not require that profit be gained by the insider to constitute the offense and the result of using inside information is irrelevant . Similarly, the nature of the use and the methods employed are indifferent: the use can be carried out by the inside themselves or through an intermediary. Furthermore, the offense is established without the need for the insider to know the identity of the operators or the details of the transactions conducted .

Article L. 465-1 only criminalizes the positive act of directly or indirectly conducting a transaction before the public becomes aware of inside information. Thus, entering into a commitment by signing a confidentiality letter, or refraining from market intervention due to held information, cannot constitute insider trading . However, the use of inside information is established when only the possession of insider information can explain the investments made in the security .

Purchase and sale orders executed by a deputy head of the inspection department within the former Commission des opérations de bourse, immediately after receiving a letter addressed to him containing information on a public tender offer or exchange offer of the issuing company, likely to influence the stock price , or the acquisition by the former employee of a company of securities in exceptional quantity, just after becoming aware of a project to buy back the securities by a foreign company , characterize the use of the information. Similarly, the purchase of securities can only result from an investor's knowledge of a public acquisition offer project given the significance of the investments in securities made, in absolute and relative value, compared to his usual investments, both for himself and for companies, the lack of prior particular interest in these securities, and the absence of a credible explanation for their acquisition date, which his status as a professional investor and financial expertise do not suffice to justify .

The commission of the offense can be inferred from the mere possession of inside information since a presumption of undue use weighs on the inside . Possession constitutes a fact that can be proven by any means, notably, in the absence of material evidence, by a body of serious, precise, and consistent indications from which it results that only this possession can explain the transactions carried out by the persons implicated, without the need to establish precisely the circumstances under which the information reached the person who used it, provided that the convergence of these indications establishes it unequivocally and that the justifications put forward by the prosecuted persons do not dispel the suspicions and indications motivating the prosecution . Thus, the chronology of investments, their speed, the methods of placing orders, the volume of purchases, the significant amounts invested in view of the available resources, the explanations and justifications given by the defendant for their interventions, are sufficient to establish that only inside information, even if its exact origin is not determined, can explain the purchase of the securities . The mere chronological connection between the possession of the information and its exploitation in the market, before it is known to the public, can also characterize the offense, without having to demonstrate the existence of a cause-and-effect relationship between these two circumstances . The same applies to the intent to conceal revealed by the circumstances of the short sale conducted by the person implicated . However, while the professional experience of the defendant or their professional or personal proximity to the initial inside holder of the inside information  can be taken into account, it cannot, in itself, have sufficient probative value to characterize the possession of inside information .

The use of inside information may also be prosecuted by the AMF Sanctions Commission based on Article L. 621-15 of the Monetary and Financial Code. The constitutive elements are the same. Only the nature of the sanction differs.

Cass. com., 24 November 2021, LawLex202200008312JBJ.

CA Paris, 4 June 2020, No 19/114547, LawLex202200010988JBJ; 17 September 2020, No 19/110337, LawLex202300001949JBJ.

CA Paris, 21 October 2021, LawLex202300001941JBJ. See also, AMF, 11 December 2008, LawLex202300005880JBJ; Cons. d'Et., 22 May 2012, LawLex202300005882JBJ; Cass. com., 28 May 2013, LawLex202200011045JBJ; CA Paris, 2 October 2014, LawLex202300005877JBJ; Cons. d'Et., 10 July 2015, LawLex202300005771JBJ; CA Paris, 14 January 2016, LawLex202300005777JBJ.

Cass. crim., 30 March 2022, LawLex202200002766JBJ.

AMF, 4 December 2008, LawLex202300002026JBJ.

Cons. d'Et., 22 May 2012, LawLex202300005882JBJ.

AMF, 4 December 2008, LawLex202300002026JBJ; CA Paris, 2 October 2014, LawLex202300005877JBJ.

AMF, 15 October 2009, LawLex202300005775JBJ; Cass. com., 20 September 2011, LawLex202300005778JBJ.

Cass. crim., 26 October 1995, LawLex202200004573JBJ.

Cass. crim., 27 September 2006, LawLex202200011010JBJ.

CA Paris, 2 October 2014, LawLex202300005877JBJ.

Cass. crim., 31 October 2007, LawLex202200010977JBJ.

Cass. crim., 15 October 1998, LawLex202200009785JBJ.

White Collar Crime (en cours)

175. Use of inside information

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

175. Use of inside information

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise