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The AMF Enforcement Committee fines a financial investment advisor and its manager for breaches of their professional obligations
02 July 2020

The AMF Enforcement Committee fines a financial investment advisor and its manager for breaches of their professional obligations

In its decision of 26 June 2020, the Enforcement Committee imposed fines of €20,000 and €80,000 respectively on the company Cérès Finance and its manager Mr Patrick Thierry, as well as a 5-year prohibition to practice as a financial investment advisor on both of them.

The breaches alleged against Cérès Finance, a financial investment advisor, related to the marketing of three investment products in French overseas territories and a failure to fulfil its obligations of diligence and loyalty during the investigation procedure.

The Committee found that Cérès Finance had twice breached its obligation to publish information that was clear, accurate and not misleading in its marketing of two investment products. The Committee noted that Cérès Finance had given several of its clients sales materials that emphasised the prospects of high annual returns without presenting any of the risks linked to the investment in question. The Committee stated that it was irrelevant that some of those risks had been partially identified in the written report that Cérès Finance had provided to some of its clients, and reminded that each marketing document must meet the legislative and regulatory requirements in itself, taken separately from any other documents provided to the client.

However, the Committee dismissed the alleged breach that, for one of these two products, the company had failed to fulfil the obligation of financial investment advisors to conduct their activity with the due care and diligence that are in the best interests of their clients.

The Committee also ruled that Cérès Finance had conducted a non-guaranteed placement activity on behalf of two issuers, thereby exceeding the limits allowed by its financial investment advisor status.

In addition, the Committee held that, by cashing subscriptions from several of its clients for one of the investment products it was marketing, Cérès Finance had breached the prohibition on financial investment advisors to receive any funds other than those intended to remunerate them for their actvity.

Finally, it sanctioned the failure by Cérès Finance to fulfil its obligation of diligence and loyalty in cooperating with the investigation. In that respect, the Committee found that Cérès Finance had provided inaccurate and incomplete information to the investigators, and then interrupted all communication with them.

The Committee ruled that all these breaches were also attributable to Mr Thierry in his capacity as manager of Cérès Finance at the time of the facts.

An appeal may be lodged against this decision.


 

About the Enforcement Committee
The Enforcement Committee, which is made up of judges and professionals, has total freedom to make decisions. It can impose sanctions on any person or company whose practices contravene laws and regulations that fall within the jurisdiction of the AMF. It ratifies settlement agreements signed by the Secretary General and respondents. And it takes part in the AMF’s educational efforts by clarifying financial regulations when explaining its decisions.

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