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The AMF Enforcement Committee fines a US investment fund and its director a total of €10 million for price manipulation during an initial public offering on the Nasdaq
13 January 2025

The AMF Enforcement Committee fines a US investment fund and its director a total of €10 million for price manipulation during an initial public offering on the Nasdaq

Please note that the French version of this press release was published on 16 December 2024.

In its decision of 13 December 2024, the Enforcement Committee imposed a fine of €7 million on EcoR1 for price manipulation and breaches of its reporting obligations. A fine of €3 million was also imposed on EcoR1 director Oleg Nodelman.

The EcoR1 fund, based in San Francisco (United States), specialises in investments in small listed biotechnology companies. In 2019, this fund was a shareholder of the French biotech company Innate Pharma, listed on Euronext Paris. In October 2019, Innate Pharma announced its initial public offering (IPO) on the Nasdaq, in the United States, through the issuance of American Depositary Shares (ADSs), while retaining its primary listing on Euronext Paris. The subscription price of the ADSs was to be calculated as the weighted average of the closing price of Innate Pharma shares over five trading sessions on Euronext Paris. During these five trading sessions, EcoR1 disposed of a large number of Innate Pharma shares on Euronext Paris and was the largest subscriber of ADSs on the Nasdaq when they were issued.

The Committee found that the transactions carried out by EcoR1 on Euronext Paris, which had the effect of lowering the closing price of Innate Pharma shares over the five trading sessions and consequently lowering the subscription price of the ADSs on the Nasdaq, constituted price manipulation by fixing the price at an abnormal or artificial level, and resulting from the sale of shares at the time of the market close.

The Committee held that this breach was also attributable to EcoR1 director, Mr Nodelman.

The Committee further found that EcoR1 had twice failed to comply with its obligation to report exceeding, and subsequently falling below, the 5% threshold for holding Innate Pharma's capital and voting rights.

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.

AMF Communications Directorate