Market manipulation identified and reported by the AMF sanctioned by the Paris Tribunal Correctionnel
The Paris Tribunal Correctionnel (Criminal Court) has sanctioned a market manipulation case reported to the Financial Prosecutor (Parquet national financier) by the AMF. The court also approved four plea bargains (“Comparution sur reconnaissance préalable de culpabilité”, or “CRPC”). The AMF, which had joined the proceedings as a civil party, was awarded damages to compensate for its moral and financial damages.
On December 13, 2023, the 32nd Chamber of the Paris Tribunal Correctionnel found Mr Nicolas Miguet, Quotidien de Paris éditions (QPE), the Association pour la représentation des actionnaires révoltés (ARARE) and the political party Rassemblement des contribuables français (RCF) guilty of market manipulation and convicted them of these offences dating back to 2018. This judgment follows a report filed by the AMF to the Financial Prosecutor on 20 November 2020, exposing conduct uncovered during an investigation into the market of the security “Nicolas Miguet et Associés (NMA)”, that could constitute a market manipulation offence.
Investigations by the AMF's Investigations Division identified two types of price manipulation on the NMA share between January and December 2018:
- firstly, the passing of orders that gave false or misleading information about the price of the NMA share, or that fixed the price of the NMA security at an abnormal or artificial level;
- secondly, the employment of fictitious devices or any other form of deception or contrivance, corresponding to a pump-and-dump manipulation which drived up the share price by 477% in just a few months.
These actions enabled QPE, the ARARE and the RCF, which were managed by Mr Nicolas Miguet at the time, to sell NMA shares, realising capital gains of €72,388, €488,766 and €212,500 respectively, for a total of €773,654.
The report filed by the AMF on 20 November 2020 also targeted the broker Claresco Bourse and three of its managers and employees, Messrs. Jean-Marc Etienne, Sébastien Ferri, Pascal Rozentvaig, as being involved in this price manipulation.
Claresco Bourse and Messrs. Jean-Marc Etienne, Sébastien Ferri and Pascal Rozentvaig admitted the charges against them and accepted the penalties proposed by the Financial Prosecutor under a CRPC procedure.
On September 12, 2023, the Paris Tribunal Correctionnel approved the CRPCs, which provide:
- for Claresco Bourse: a €150,000 fine and a 3-year suspended ban on the order reception and transmission activity;
- for Mr Jean-Marc Etienne: a 10-month suspended prison sentence, a €50,000 fine (of which €15,000 suspended) and the lifting of the ban provided for in Article L500-1 of the French Monetary and Financial Code (CMF);
- for Mr Sébastien Ferri: a 8-month suspended prison sentence, €20,000 fine of which €10,000 suspended, and the lifting of the ban provided for in Article L500-1 of the CMF;
- for Mr Pascal Rozentvaig: a 8-month suspended prison sentence, a €30,000 fine (€20,000 suspended) and the lifting of the ban provided for in Article L500-1 of the CMF.
Mr Nicolas Miguet, QPE, ARARE and RCF were referred to the Paris Tribunal Correctionnel.
Mr Nicolas Miguet had already been subject to several final administrative sanctions imposed by the AMF Enforcement Committee, notably in 2022, for market manipulation.
QPE had been subject to two final administrative sanctions imposed by the AMF Enforcement Committee in 2019 and 2022.
In its decision of December 13 2023, the Paris Tribunal Correctionnel followed the analysis of the market manipulation set out in the report of the AMF's Investigations Division, and imposed the following penalties:
- against Mr Nicolas Miguet: a 24-month prison sentence, 6 months of which are suspended on probation, the actual prison sentence being served under house arrest with electronic surveillance; 5 years' ineligibility; and confiscation of €403,781 from the balance of a seized account, it being specified that the imposed penalties are subject to provisional enforcement;
- against QPE: €100,000 fine, of which €27,612 suspended, and confiscation of €142,223.74 from the balance of seized accounts;
- against ARARE: €800,000 fine, of which €311,234 suspended, and confiscation of €181,637.20 from the balance of seized accounts;
- against RCF: a €400,000 fine, of which €187,500 was suspended.
The court also deemed the AMF’s civil party status admissible, as the regulator was present at the hearing on October 2, 4 and 5 2023. It ordered Mr Nicolas Miguet, QPE, the ARARE and the RCF jointly and severally to pay the AMF €1 in symbolic compensation for moral damages and €6,230 in compensation for financial damages.
This decision is subject to appeal.
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