Articles L.465-1 and L.621-15 of the French Monetary and Financial Code (FMFC), which define market abuse offences and set out the related sanctions, have been modified several times to increase the powers of the AMF (the French financial market authority) and the amount of potential sanctions (up to €10 million in the 2008 version and €100 million in the current version of these provisions). The compliance of these articles with the French Constitution was challenged during the EADS case before the Paris Criminal Court (the parties had already been found not guilty of any misconduct before the AMF sanction committee). For the first time, the challenge was referred to the Constitutional Council (previous decisions had systematically rejected the referral of such requests considering that it had already been settled by the Constitutional Council).
In its decision, rendered on 18 March 2015, the Council, contrary to the ECHR, did not turn to the ne bis in idem principle but relied on the principle of “nécessité des délits et des peines”, that offences should be created and penalties should be imposed only where necessary (Decision n° 2014-453/454 and 2015-462). The Council ruled that, for unregulated persons or entities, double prosecution of market abuse breached this principle since:
- administrative and criminal offences are defined in the same manner;
- both types of offences intend to protect the same social interests;
- the possible sanctions for the offender are of a similar nature;
- judicial courts (that is, those French courts that deal with private law, as opposed to administrative courts)have jurisdiction over both types of offences.
As a consequence, the 2008 version of Articles L.465-1 and L.621-15 was considered unconstitutional and will be partially repealed as from 16 September 2016. In the meantime, where there has been double prosecution, the proceedings with the later starting date, whether administrative or criminal, are invalidated (as in the EADS case) and new double prosecutions cannot be started.
Academics have pointed out that this decision of the Constitutional Council is not consistent with European case law, since it uses different reasoning to exclude the simultaneous application of criminal and regulatory provisions. Situations could, therefore, occur where the French system would still allow the double prosecution of market abuse, notably against regulated persons or entities.