The Court of cassation rejected this argument

The Court of cassation issued March 9, 2010, a decision passed unnoticed but which could pave the way for new litigation liability of administrators. It recognizes the right of the shareholders of a corporation to seek damages and interest against the directors in compensation for the damage suffered to false information because, not a participation in the development of erroneous information, but their lack of response to change.

In this case, administrators failed to reflect the difficulties of the company in the news. The reasons for the decision of the Court of appeal of Limoges, supported by the Court of cassation, deserve to be cited: "the administrators involved in the management of the company must discuss all problems brought to their knowledge, which was the case with the reservations expressed by the Auditors and cannot, except to consider that they endorsed the terms".admit that the President make State in its releases misleading information about the actual situation the company.

Administrators had reminded the judges of appeal that listeners reserves had been published in the bulletin of legal ads mandatory (Balo) and also appeared as a warning on the first page of all the references. The Court of appeal nevertheless found, that the Court of cassation not censorship, that these warnings could not be considered as sufficient while releases gave a burgeoning image of the company.

Failure of intervention

The plaintiffs to appeal also argued that as directors, their responsibility could not be brought by third parties (shareholders) that if they had committed a fault of a particular severity, incompatible with the normal exercise of social functions. The Court of cassation rejected this argument. According to her, the shareholders are not third parties and a simple fault is sufficient with respect to base their action against the officers and directors.

Of course, this decision was made while the company had filed the balance, in which it is not uncommon that administrators be condemned civilly. But the Court stated firmly that a lack of intervention by administrators for false information alleged leaders can engage their liability to the shareholders - that the company has filed its balance sheet-, while not them is not accused of having participated in the incriminated irregularity, or even to a fault characterizing abstention of exceptional gravity.

This implies that administrators face their responsibility if they do not act as an irregularity or serious difficulty has been brought to their knowledge. Similarly, they control the information provided by the company to ensure that she mentioned these difficulties or, at least, that it takes them into account.

Some associations of shareholders complained about the very great difficulty for questioning the responsibility of the directors when the company is not in cessation of payments. Judgment may be the source of more litigation in the matter. Perhaps aware of this, the Court of cassation States that prejudice may be that of loss of chance to invest capital in other investment or to waive that already made.

However, one might consider that some situations indeed reveal a loss directly related to the dissemination of misleading information to the market. For example, if the Manager of a UCITS is reached for the purchase and sale after analysts reports incorporating the false information and then its correction. Damage must then, in principle, correspond to the difference between the share price after the dissemination of erroneous information and the following revelation correspond to reality. It may be necessary to neutralize the effects of other information - an exercise, it is true, fairly complex but not impossible.

The reflections in the Working Group of the authority of the financial markets on the determination of the prejudice of the shareholders in the case of market abuse may be very useful for the resolution of this issue. It is surprising that a decision of such importance has not been rendered by the plenary Chamber. Can be to even imagine a later evolution of the jurisprudence