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Market Abuse Regulation - Commentary and Annotated Guide edited by Ventoruzzo, Marco; Mock, Sebastian (30th November 2017)

Part A Annotated Guide, 6 Private Enforcement of the Market Abuse Regulation in European Law

Danny Busch

From: Market Abuse Regulation: Commentary and Annotated Guide

Edited By: Marco Ventoruzzo, Sebastian Mock

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 22 January 2019

Subject(s):
Investment business — Market abuse — Market Abuse Directive (MAD) — Regulated activities

(p. 85) Private Enforcement of the Market Abuse Regulation in European Law

I.  Introduction

A.6.01  The Market Abuse Regulation has been applicable in the EU/EEA since 3 July 2016. As regulatory provisions of this nature are classified as public law, any failure to comply with provisions of the Market Abuse Regulation will primarily affect the infringer’s relationship with the competent financial supervisor. In other words, the relevant financial supervisor can enforce these provisions under administrative law in the event of an infringement, for example by imposing an administrative fine. This is essentially no different from the situation under the (p. 86) Market Abuse Regulation’s predecessor— Market Abuse Directive (2003/6/EC), as implemented in the various national legal systems.

A.6.02  However, an infringement of the key provisions of the Market Abuse Regulation in any event also has an important effect on the private law relations between the infringer and the investing public. By ‘key provisions’ I mean (i) the prohibition of insider dealing (Article 14(a) in conjunction with Article 8(1) of the Market Abuse Regulation); (ii) the prohibition of unlawful recommendation and disclosure (Article 14(b) in conjunction with Article 8(2) of the Market Abuse Regulation and Article 14(c) in conjunction with Article 10(1) and (2) of the Market Abuse Regulation, respectively); (iii) the prohibition of market manipulation (Article 15 in conjunction with Article 12 of the Market Abuse Regulation); and (iv) the requirement of prompt public disclosure of inside information (Article 17 Market Abuse Regulation).1

A.6.03  In Dutch case law and literature, it is now commonly accepted that an infringement of the key provisions of the (former) Market Abuse Directive (2003/6/EC), as implemented in the Dutch Financial Supervision Act (Wet op het financieel toezicht) until 3 July 2016, constitutes a tort (unlawful act) on account of contravention of a statutory duty (Article 6:162(2) Burgerlijk Wetboek or Dutch Civil Code (DCC)2). Above all, a breach of the requirement of prompt public disclosure of inside information has proved to be a popular ground in Dutch legal practice for bringing liability proceedings not only against the issuer itself but also against its directors.3 All of this will remain essentially unchanged in the Netherlands under the Market Abuse Regulation, although it should be noted that it will now be much easier for aggrieved investors to prove a breach of the (p. 87) obligation to provide public disclosure of inside information. However, in some other jurisdictions within the EU/EEA, the knock-on effect of the European market abuse rules in civil liability law is taken much less for granted.4 To this extent, the Netherlands would appear to be leading the way within Europe in recognising the direct effect of EU market abuse rules in civil liability law. Frequent references will therefore be made to Dutch law below. Dutch case law on the collapse of Fortis, the Belgian–Dutch banking and insurance group, will play a central role in this connection.

II.  Questions under Consideration

A.6.04  This chapter examines the extent to which the civil courts are bound under EU law by the key provisions of the Market Abuse Regulation. The following questions are considered in this context: (1) May civil courts apply standards that are less strict than the key provisions of the Market Abuse Regulation? (2) May civil courts apply standards that are stricter than the key provisions of the Market Abuse Regulation? (3) What effect do the key provisions of the Market Abuse Regulation have on the requirement of proximity or relativity in the Member States where this is a requirement for liability in tort? (4) What effect do the key provisions of the Market Abuse Regulation have on the proof of causal link? (5) Should civil courts apply the key provisions of the Market Abuse Regulation of their own motion? Afterwards, I consider how the Market Abuse Regulation makes it easier to establish proof in civil proceedings of a breach of the requirement of public disclosure of inside information. In the final section I draw some conclusions.

III.  May Civil Courts Be Less Strict than the Market Abuse Regulation?

General

A.6.05  May civil courts apply standards that are less strict than the key provisions of the Market Abuse Regulation? Let me concentrate on four categories of case:

  1. (1)  The civil courts refuse a claim for damages brought for a breach of a key provision of the Market Abuse Regulation because under private law they apply a principle that is less strict and has not been infringed (category 1).(p. 88)

  2. (2)  The civil courts refuse a claim for damages brought for a breach of a key provision of the Market Abuse Regulation, but not because in private law they apply a principle that is less strict and has not been infringed. In this case, they recognise the European rule. Breach of a key provision of the Market Abuse Regulation constitutes a tort as it is a contravention of a statutory duty.5 Nonetheless, the civil courts refuse the claim for damages in the specific case because there is a ground of justification for the breach.6 This means that the infringement is not unlawful (category 2).

  3. (3)  An issuer breaches the requirement that inside information must be disclosed as soon as possible (Article 17 Market Abuse Regulation7). This requirement is binding only on the issuer and—unlike, say, the prohibition of market manipulation (Article 15 in conjunction with Article 12 of the Market Abuse Regulation8)—not on anyone else. The director who is in actual control of the issuer when it commits this breach therefore acts, by definition, in his capacity of director of the issuer. In keeping with the prevailing doctrine in the Netherlands, the increased liability threshold for serious personal culpability then applies in full under Dutch law (category 3).9

  4. (4)  A person who commits market manipulation (Article 15 in conjunction with Article 12 of the Market Abuse Regulation10) is a person who makes (p. 89) misleading statements in his capacity of director of an issuer. In keeping with the prevailing doctrine in the Netherlands, the increased liability threshold for serious personal culpability then applies in full under Dutch law (category 4).11

Category 1

A.6.06  The judgment of the Dutch Supreme Court (Hoge Raad der Nederlanden or HR) in the case of FortisEffect and Others v Netherlands is of particular interest in illustrating category 1.12 For an international readership, it is important first of all to pause and consider the background to the Fortis case.

A.6.07  In October 2007 a greatly weakened ABN AMRO had fallen prey to an international banking consortium consisting of the Belgian–Dutch banking and insurance group Fortis, the Royal Bank of Scotland, and the Spanish company Banco Santander. Against the background of the global financial crisis and the bankruptcy of Lehman Brothers on 15 September 2008, the planned takeover soon proved to be a crippling financial burden on Fortis. On 3 October 2008, the Fortis Group had to be broken up along national lines and parts were nationalized. In this way, ABN AMRO came into the hands of the Dutch state. What followed was an avalanche of legal proceedings in Belgium and the Netherlands.13

A.6.08  One of the legal actions brought in the Netherlands was instituted by Stichting FortisEffect and Others. They applied to the Utrecht District Court for a declaratory judgment that Fortis and the State of the Netherlands had acted unlawfully by furnishing incorrect and misleading information. They also requested the court to order Fortis and the Netherlands to pay compensation for the resulting loss and damage and to direct that this should be quantified. The court rejected the applications. On appeal, the Court of Appeal upheld the judgment of the lower court in relation to the claim against the Netherlands. However, in relation to Fortis the Court of Appeal quashed the judgment and gave—inter alia—a declaratory ruling that Fortis had acted unlawfully in the period from 29 September 2008 to 1 October 2008, in breach of sections 5:58 (prohibition (p. 90) of market manipulation) and 5:59 (old) (requirement to provide prompt public disclosure of inside information) of the Dutch Financial Supervision Act.14

A.6.09  The only part of the Dutch Supreme Court’s judgment relevant to the present discussion is the dismissal of the claim against the Netherlands. Initially, an appeal in cassation had also been lodged against the Court of Appeal’s decision to allow the claim against Fortis, but this matter was settled out of court before the Dutch Supreme Court could give judgment.15 The legal battle on which the spotlight is now focused is therefore not the proceedings against Fortis but those against the State of the Netherlands.

A.6.10  On Thursday 2 October 2008, the Minister of Finance made statements in the House of Representatives of the Dutch parliament (Tweede Kamer) about the first rescue operation for Fortis. According to FortisEffect and Others, these statements were incorrect and/or misleading within the meaning of what was then section 5:58 of the Dutch Financial Supervision Act (now Article 15 in conjunction with Article 12 of the Market Abuse Regulation). It was argued that during the Thursday debate the minister had failed to divulge that the transaction on the preceding Sunday evening had not had the desired effect and that more far-reaching measures were necessary and the negotiations to achieve this were already at an advanced stage. The Court of Appeal held as follows on this point:

4.2.16.  As noted above, the State was aware on Thursday 2 October 2008 that the transaction concluded on Sunday 28 September 2008 had not had the desired effect. Nonetheless, this does not alter the fact that it was appropriate for the State to inform the House of Representatives about the background to the transaction in the manner in which it did. In the Court of Appeal’s view, it was reasonable for the State—given the great importance to the financial system—to decide at that time that information about the more far-reaching measures it was planning did not yet need to be disclosed as this—in its reasonable estimation—would have immediately led to a further undermining of confidence in Fortis, possibly triggering events beyond the control of Fortis and the banking system. The statements made during the debate in the House of Representatives were not of such a nature that the average informed, prudent and observant investor—bearing in mind, among other things, the falling price of Fortis shares—could have concluded that the problems with Fortis had been resolved and that the rescue operation had been a success.

(p. 91) 4.2.17.  It follows that the State did not breach section 5:58 of the Dutch Financial Supervision Act or otherwise act unlawfully by making the statements discussed above.16

A.6.11  FortisEffect and others are appealing in cassation against the judgment of the Court of Appeal and have submitted, among other things, that the finding expressed above is insufficiently (clearly) reasoned (ground of cassation 9.3). In his Opinion in this case, Advocate General Timmerman wonders how paragraph 4.2.16 of the Court of Appeal’s judgment as set out above should now be interpreted.17 According to him, the Court of Appeal’s finding is essentially that, leaving aside the question of whether or not the investor was misled by the failure to disclose the relevant information, the actions of the Netherlands were justifiable (or, in any event, not culpable) because it was faced with events beyond its control (force majeure). The Advocate General points out that this interpretation of paragraph 4.2.16 is in keeping with what is said in paragraph 4.3.5, at (a):

The question of the extent to which the State (wrongly) disseminated incorrect, incomplete or misleading information about Fortis (and its rescue) has already been considered in relation to the submission by FortisEffect and Others that the State contravened the Dutch Financial Supervision Act. The conclusion was that no blame could be attached to the State in that respect [italics added by the Advocate General].

A.6.12  Advocate General Timmerman notes in his Opinion that there is no scope for an argument based on grounds of justification in the context of an assessment of compliance with section 5:58 of the Dutch Financial Supervision Act. A statement does not become less incorrect or misleading because the party that made it was faced with events beyond its control. Moreover, a precise interpretation of the rule contained in section 5:58 of the Dutch Financial Supervision Act is all the more important because the Netherlands Authority for the Financial Markets (AFM)18 and the administrative courts are also called upon to interpret and apply this provision in the context of their supervision under public law.19

A.6.13  Advocate General Timmerman notes in passing that, although the Court of Appeal held that in the circumstances the actions of the Netherlands could be justified (or were not culpable), this does not mean, in his view, that the Court of Appeal intended to treat this as a ground of justification within the meaning of Article 6:162(2) of the Dutch Civil Code.20 The finding in question in paragraph (p. 92) 4.2.16 has been placed in the context of assessing whether there were misleading statements within the meaning of section 5:58 Dutch Financial Supervision Act, and the term ‘ground of justification’ was not used by the Court of Appeal. He also refers to paragraph 4.7.3, in which the Court of Appeal held that since, in its view, the State had not acted unlawfully, ‘any application of the ground of justification (is) no longer relevant’.21

A.6.14  All things considered, Advocate General Timmerman concludes as follows:

In view of the above, I believe that the submission put forward in part 9.3 … of the appeal in cassation succeeds. In the light of arguments put forward by FortisEffect and Others, I consider that the reasons given by the Court of Appeal for finding that section 5:58 of the Dutch Financial Supervision Act was not contravened during the Thursday debate are not sufficiently clear. Although the statements that were made by the Minister were not—according to the Court of Appeal—misleading, the Court of Appeal did not recognise—or did not sufficiently recognise—that the average investor may also have been misled (within the meaning of section 5:58 of the Dutch Financial Supervision Act) since essential information was omitted when providing the information. There can be no doubt, in my view, that the information to which FortisEffect and Others refer (including the fact that it was already clear on the Thursday that the first rescue operation had not had the desired effect and would no longer be implemented and that negotiations were under way about much more far-reaching measures) constituted essential information of this kind. It also follows from the above that a finding that the actions of the State were justified cannot also support a finding that there was no contravention of section 5:58 of the Dutch Financial Supervision Act.22

A.6.15  According to Advocate General Timmerman, what the Court of Appeal did was, in short, to read an additional requirement into section 5:58 of the Dutch Financial Supervision Act which cannot be found either in that provision or in the (former) Market Abuse Directive (2003/6/EC) on which it was based, and then to conclude that there had been no contravention of the rule. It is clear from this that the Court of Appeal in fact applied a standard which was less strict than the provision actually contained at that time in section 5:58 of the Dutch Financial Supervision Act implementing the (former) Market Abuse Directive (2003/6/EC) and which now follows directly from Article 15 in conjunction with Article 12 of the Market Abuse Regulation. The Court of Appeal’s reasoning can be seen as a ‘veiled’ example of a category 1 case.

A.6.16  However this may be, category 1 cases are at odds with the European principle of effectiveness, as formulated, inter alia, by the Court of Justice of the European (p. 93) Union (CJEU) in its Immofinanz judgment.23 That case concerned the private law consequences of rules from the Prospectus Directive (2003/71/EC), the Transparency Directive (2013/50/EU), and the (former) Market Abuse Directive (2003/6/EC). In paragraph 40 of the judgment the CJEU held as follows:

While it is true that, unlike Article 25(1) of the Prospectus Directive, Article 28(1) of the Transparency Directive and Article 14(1) of the Market Abuse Directive do not expressly refer to the civil liability regimes in the Member States, the fact remains that the Court has previously ruled that, in respect of the award of damages and the possibility of an award of punitive damages, in the absence of European Union rules governing the matter, it is for the domestic legal system of each Member State to set the criteria for determining the extent of the damages, provided that the principles of equivalence and effectiveness are observed [italics added by the author] (see, by analogy, Joined Cases C-295/04 to C-298/04 Manfredi and Others [2006] ECR I-6619, paragraph 92, and the judgment of 6 June 2013 in Case C-536/11 Donau Chemie and Others [2013] ECR, paragraphs 25 to 27).

A.6.17  The CJEU had previously taken a similar line in relation to the Markets in Financial Instruments Directive I (2004/39/EC) in the Genil case.24 In this judgment the CJEU had held that in the absence of EU legislation it is for the Member States themselves to determine the contractual consequences of non-compliance with the know-your-customer (KYC) rules under MiFID I, but that the principles of equivalence and effectiveness must be observed (paragraph 57).25 The Court of Justice referred in this connection to paragraph 27 of a judgment of 19 July 2012 concerning a tax matter (Littlewoods Retail and Others, Case C-591/10) and the case law cited there. This paragraph reads as follows:

In the absence of EU legislation, it is for the internal legal order of each Member State to lay down the conditions in which such interest must be paid, particularly the rate of that interest and its method of calculation (simple or compound interest). Those conditions must comply with the principles of equivalence and effectiveness; that is to say that they must not be less favourable than those concerning similar claims based on provisions of national law or arranged in such a way as to make the exercise of rights conferred by the EU legal order practically impossible [italics added by the author] (see, to that effect, previously cited cases San Giorgio, paragraph 12; Weber’s Wine World, paragraph 103; and Case C-291/03 MyTravel [2005] ECR I-8477, paragraph 17).26

(p. 94) A.6.18  The principle of effectiveness therefore means that the conditions which an investor must fulfil in order to bring a civil liability action may not be such that success is practically impossible or even extremely difficult. The judgment appears to mean, in so far as relevant here, that civil courts may not be less strict than is possible under the EU market abuse rules. Where, according to the EU rules, there is market manipulation in a specific case and the aggrieved investors bring a civil action for damages, the civil courts may not dismiss this claim by holding that in the particular circumstances the rule applied in private law is less strict. As the market abuse rules are intended to achieve maximum harmonization, this would, after all, clash with the principle of effectiveness.

A.6.19  If this were not the case, the principles of legal certainty and the European level playing field would be put under great strain, particularly since the EU market abuse rules themselves provide for a detailed list of situations in which the prohibition of market manipulation does not apply, such as stabilization of market prices.27 All of this applies to an even greater extent under the Market Abuse Regulation. The instrument of a regulation was expressly chosen since the requirements would then be directly applicable, which would thus ‘provide more legal certainty’ and ‘ensure uniform conditions by preventing diverging national requirements as a result of the transposition of a directive’. The Market Abuse Regulation ‘will require that all persons follow the same rules in all the Union’.28 This approach can be extended to claims for damages for non-compliance with the prohibition of insider dealing, the prohibition of unlawful recommendation and disclosure, and the requirement of public disclosure of inside information.

Category 2

A.6.20  This brings me to category 2 cases. Here the basis for rejection by the civil courts of a claim for damages is not (as in category 1 cases) that a less strict rule is applicable and has not been infringed. The civil courts recognise the EU criterion. Infringement of the market abuse rules constitutes a tort for contravention of a statutory duty. Nonetheless, the civil courts reject the claim for damages because the existence of a ground of justification exists as referred to in Article 6:162(2) (last words), DCC means that the infringement is not unlawful.29

(p. 95) A.6.21  Although the Amsterdam Court of Appeal did not, according to Advocate General Timmerman, view the case of FortisEffect and Others v Netherlands as a category 2 case, the issue of whether or not this category was consistent with the European principle of effectiveness was nonetheless sufficiently intriguing for the Advocate General to devote a passage in his Opinion to it. According to the Advocate General, category 2 cases are not inconsistent with the European principle of effectiveness:

In my view, the principle of effectiveness does not warrant the general conclusion that the ground of justification rule should not be applied in the case of a claim for damages for breach of section 5:58 of the Dutch Financial Supervision Act. The legitimacy of this rule of general Dutch tort law, under which in (very) special circumstances a tortious act need not necessarily result in liability, does not mean that Dutch law does not provide for adequate legal redress in the event of an infringement of section 5:58 of the Dutch Financial Supervision Act.30

A.6.22  I do not share the Advocate General’s conviction that category 2 cases are not inconsistent with the European principle of effectiveness. The possibility of invoking a ground of justification within the meaning of Article 6:162(2) (last words) DCC enables Dutch civil courts to introduce exceptions to the European market abuse rules which do not have a statutory basis in EU law. I am all the more hesitant because the European market abuse rules themselves contain a detailed list of exceptions to which the prohibition of market manipulation is not applicable.31 As the aim of the European market abuse rules is to achieve maximum harmonization, civil courts should, in my view, be very cautious about introducing national exceptions, for example by assuming a ground of justification within the meaning of Article 6:162(2) (last words) DCC. As noted previously, this applies even more following the introduction of the Market Abuse Regulation, since the decision to have a regulation was made precisely in order to ensure legal certainty and a level playing field (‘uniform conditions’). Whether the reasoning used by the civil courts must be regarded as a category 1 or category 2 case is immaterial. In both cases, the court concerned would be making a substantive exception to the European market abuse rules which is not covered by one or more of the exceptions provided for in these rules themselves.

Intermezzo

A.6.23  Naturally, however, it would be unsatisfactory if the State of the Netherlands were to be liable to aggrieved investors for damage suffered by them because the Minister of Finance had been guilty of market manipulation in the House of Representatives. When the Minister was called to the House of Representatives to (p. 96) report on the first rescue operation of Fortis, he decided not to disclose information about the plans for more far-reaching measures. I agree with the Amsterdam Court of Appeal that it was entirely understandable and indeed sensible not to disclose the information at that stage. After all, it was reasonable to suppose that any such disclosure would have immediately undermined confidence in Fortis still further, possibly triggering events that would be beyond the control of Fortis and the banking system.

A.6.24  The Dutch Supreme Court has extricated itself from this problem in a way that avoids getting caught up in complicated discussion about the European principle of effectiveness. It does so by interpreting the judgment of the Court of Appeal as follows:

3.9.4.  [t]‌he view of the Court of Appeal … is essentially that although the Minister did not always disseminate full information, this did not give—nor was it likely to give—a misleading signal to investors since they were aware of the context in which the rescue operations and the disclosure of information were taking place, and the Minister’s decision not to provide full information was also justified by the importance of maintaining the stability of the financial system, especially in the second period.

3.11.  It is implicit in the judgment of the Court of Appeal that the investors should have realised that the Minister was reporting on the transaction of Sunday 28 September 2008 and not on the current state of the rescue operation. In this light, and taking into account the wording chosen by the Minister …, it was not unreasonable for the Court of Appeal to hold that what was said by the Minister during the parliamentary debate did not create the impression that the problems with Fortis had been resolved and that the rescue operation was a success.32

A.6.25  In short, in view of the context of the financial crisis and the wording chosen by the Minister of Finance in the debate in the House of Representatives on 2 October 2008, the information he provided could not be said to have been misleading within the meaning of what was then section 5:58 of the Dutch Financial Supervision Act and is now Article 15 in conjunction with Article 12 of the Market Abuse Regulation. The Dutch Supreme Court does not in fact answer the question of whether the minister’s actions were justified (ie whether this was a category 1 or category 2 case). In this way, it circumvents the pitfalls of EU law which it would otherwise have to negotiate if it were accepted that the minister misled the House of Representatives and hence the public too within the meaning of section 5:58 of the Dutch Financial Supervision Act, which is now Article 15 in conjunction with Article 12 of the Market Abuse Regulation.

A.6.26  The conclusion that the State of the Netherlands is not liable to aggrieved investors for market manipulation is to be welcomed in a social sense. But in a legal (p. 97) sense it is hard to accept. Can it really be argued that the minister was not guilty of market manipulation on 2 October 2008? For the sake of the future, it would in any event be preferable for the Netherlands to push for an amendment to the Market Abuse Regulation to enable an exception to be made to the prohibition of market manipulation in the interests of protecting the stability of the financial system. Nor is this idea so far-fetched when one thinks that an issuer which is a bank or other financial institution may delay public disclosure of inside information if this is necessary to maintain the stability of the financial system.33 As matters stand, it is therefore permissible to stay silent in the interests of the stability of the financial system, but not to tell half-truths. Where staying silent is not an option (ie because the Minister is bound to report to the House of Representatives), telling half-truths too should be permissible in the interests of the stability of the financial system.

Categories 3 and 4

A.6.27  Let us now move on to category 3 cases. An issuer breaches the requirement of prompt public disclosure of inside information. This is a provision that is binding exclusively on the issuer and not—as, say, in the case of the prohibition of market manipulation—on everyone. The director who is in actual control of the issuer at the time of this conduct therefore acts, by definition, in his capacity of director of the issuer. In keeping with the prevailing doctrine in the Netherlands, the increased liability threshold for serious personal culpability then applies in full under Dutch law (category 3 case).34

A.6.28  Finally, we come to category 4 cases. A person who commits market manipulation is a person who makes misleading statements in his capacity of director of an issuer. In keeping with the prevailing doctrine in the Netherlands, the increased liability threshold for serious personal culpability then applies in full under Dutch law (category 4 case).35

(p. 98) A.6.29  Cases in categories 3 and 4 do not involve the application by the civil courts of criteria that are less strict than the European market abuse rules, although this may perhaps not be apparent at first sight.

A.6.30  Where the requirement of prompt public disclosure of insider information is infringed, in a legal sense, the infringer in category 3 cases is not the director in his capacity of a natural person but the legal person at whom the provision is exclusively targeted. The requirement of serious culpability is not imposed in respect of that legal person, nor is there a higher liability threshold than that prescribed by the European prohibition of market manipulation.

A.6.31  Where market manipulation is committed in a legal sense, the infringer in category 4 cases is not the director in his capacity of natural person but the legal person to whom the unlawful act must be imputed. The requirement of serious culpability is not imposed in respect of that legal person, and the liability threshold is not higher than that prescribed by the European prohibition of market manipulation. Nor, in my view, would the position be any different if, in the meantime, the legal person has become bankrupt and no longer provides any opportunity for recovery.

IV.  May Civil Courts Be Stricter than the Market Abuse Regulation?

General

A.6.32  Another question of both theoretical and practical importance is whether the rules that civil courts apply may be stricter than the key provisions of the Market Abuse Regulation and the (former) Market Abuse Directive (2003/6/EC). In practice, this question could become topical in civil liability proceedings or in an investigation procedure (enquêteprocedure) before the Enterprise Court (Ondernemingskamer or OK) at the Amsterdam Court of Appeal. An example would be where an issuer delays disclosure of inside information in accordance with the requirements imposed by the European market abuse rules. Under EU law, would it nonetheless be permissible for a civil court to hold that as a result of the delay a rule of private law has been breached or for the Enterprise Court to hold that the delay constitutes mismanagement?

A.6.33  An example of an investigation procedure before the Enterprise Court in which this issue arose was the Fortis case. Here this very question was expressly raised (p. 99) by Fortis’s lawyers in one of the grounds of cassation set out in their appeal against the decision of the Enterprise Court.36 The company investigation procedure before the Enterprise Court will be dealt with in more detail later on in this chapter. For now it is sufficient to note that the aim of the procedure is to allow a company’s affairs to be investigated with a view to possibly reorganising the company, restoring sound relations within it, allowing proper disclosure and, where applicable, allocating responsibility for any mismanagement.37 In its final ruling on Fortis, the Enterprise Court formulated this as follows:

The Enterprise Court should assess whether the report of the investigation shows that the acts or omissions of Fortis, its organs or their members, as alleged by the Association of Stockholders (VEB) and others, constitute mismanagement. This will be the case if Fortis’s acts or omissions have been so negligent or reprehensible that they must be held to have breached fundamental principles of sound business practice.38

A.6.34  I would point out that it is not yet entirely clear whether the Enterprise Court actually held in the Fortis case that certain acts constitute mismanagement, given that the acts in question are covered by and permissible under the (former) Market Abuse Directive (2003/6/EC) and the rules of the Dutch Financial Supervision Act based on it. From the cautious wording of the relevant ground of appeal in cassation (‘if and in so far as’39) it might even be inferred that Fortis was of the same opinion. In any event, the Dutch Supreme Court has not explicitly answered the question raised in the cassation appeal against the decision of the Enterprise Court, even by way of obiter dictum. The Dutch Supreme Court simply dismisses the ground of appeal concerned without expressly answering the question raised in it.

A.6.35  In dismissing the ground for appeal in cassation, the Dutch Supreme Court merely held in a general sense that whether or not certain acts by Fortis were permissible under the (former) Market Abuse Directive (2003/6/EC) and the rules of the Dutch Financial Supervision Act based on it was not decisive in determining whether there had been mismanagement.40 Naturally, this finding is, broadly speaking, unobjectionable. The mere fact that the European market (p. 100) abuse rules are infringed by the company or by its senior management does not itself warrant the conclusion of mismanagement. Naturally, it would be different if the acts in question were to involve serious and/or systematic breaches of supervisory legislation. Neither the Enterprise Court nor the Dutch Supreme Court explicitly makes this distinction, but the wording of their judgments does leave scope for such a conclusion. And it should also be noted, of course, that even where European market abuse rules are not infringed mismanagement may still exist for other reasons.

A.6.36  However, this means that the Dutch Supreme Court has not yet resolved the specific issue raised in the ground of appeal in cassation in the Fortis case as outlined above, namely where a given act is covered by and permissible under the European market abuse legislation but the Enterprise Court holds that the act in question constitutes mismanagement.41 This brings us back to the question I raised at the end of paragraph A.6.32, namely whether a civil court (including the Enterprise Court) may apply stricter standards than those prescribed by the European market abuse rules.

Immofinanz  and Genil

A.6.37  The judgments in the Immofinanz and Genil cases do not in any event seem to provide a definitive answer to the question of whether civil courts may apply stricter standards than the European market abuse rules.42 If, for example, a civil court holds that although an issuer is admittedly entitled to delay public disclosure of inside information under the European market abuse rules this is not possible in private law, this does not deprive an aggrieved investor of a claim for breach of the European market abuse rules. Where a civil court applies stricter standards than the European market abuse rules this does not appear to be at odds with the principle of effectiveness as formulated by the Court of Justice in the Immofinanz and Genil judgments. It should be noted, however, that the question whether civil courts may apply stricter standards than the European market abuse rules was not at issue in the Immofinanz and Genil cases, and was therefore not answered explicitly. The Immofinanz judgment was solely about the private law consequences of a breach of, among other things, the market abuse rules, and the Genil case was solely about the private law consequences of non-compliance with the MiFID I KYC rules. However, none of this precludes the possibility that (p. 101) it could be argued on the basis of other principles of EU law that civil courts may not apply stricter standards than the European market abuse rules. Some pointers can be found in the CJEU’s judgment in the case of Nationale-Nederlanden v Van Leeuwen concerning exorbitant management costs charged in connection with life insurance policies.43

Nationale-Nederlanden v Van Leeuwen

A.6.38  The Nationale-Nederlanden judgment appears to show that European law is blind to the distinction between public and private law in relation to European legal standards.44 In Nationale-Nederlanden the CJEU did not, after all, have any difficulty in accepting that Annex II to the Third Life Assurance Directive45 was implemented in the Netherlands in Article 2 of the Regulation regarding the provision of information to policyholders 1998 (Regeling informatieverstrekking aan verzekeringsnemers 1998/RIAV 1998) (public law), whereas the option for Member States in Article 31(3) of the Third Life Assurance Directive to require assurance undertakings to furnish additional information could be implemented through the requirements of reasonableness and fairness (redelijkheid en billijkheid) of Article 6:2 DCC (private law).

A.6.39  If it is correct that European law is blind to the distinction between public and private law, this also has an important impact on whether civil courts, including the Enterprise Court, may apply stricter standards than those of the European market abuse rules. The European market abuse rules provide for maximum harmonization. If European law is truly blind to the distinction between public and private law in relation to European legal standards, the principle of maximum harmonization must also apply to civil courts, including the Enterprise Court. This would mean that they cannot impose stricter duties under private law than the criteria resulting from the market abuse rules, regardless of whether they are included in a directive or a regulation. In the Immofinanz and Genil judgments, the Court of Justice admittedly held that in the absence of EU legislation it is for the Member States themselves to determine what effect non-compliance with European directives has under private law (provided that it is not practically impossible to recover compensation for the loss or damage suffered), but this refers to the sanction and not to the legal rule itself.

(p. 102) V.  Influence of the Market Abuse Regulation on the Requirement of Relativity

A.6.40  In some European jurisdictions a tort claim based on breach of statutory duty cannot succeed in the absence of ‘proximity’ or ‘relativity’.46 This means that the relevant duty must not only serve the general interest, but also the claimant’s proprietary interests. In the jurisdictions imposing a relativity requirement the question therefore arises whether this requirement is met where there is a breach of a key provision of the Market Abuse Regulation.

A.6.41  In the Netherlands the requirement of relativity must have been met if there is to be liability in tort (Article 6:163 DCC). In so far as relevant here, this means that one of the aims of the key provision of the European market abuse rules that has been infringed must be to offer protection for the loss or damage suffered by the investor. Although the Immofinanz and Genil judgments admittedly show that in the absence of EU legislation it is for the Member States themselves to determine the private law consequences of non-compliance with, among other things, the market abuse rules, various requirements including the principle of effectiveness must always be fulfilled. In this context, the principle of effectiveness means that the conditions on which an investor may sue an infringer of a key provision of European market abuse rules may not be such as to make it impossible or extremely difficult to mount a successful action in practice.

A.6.42  It is submitted that the European principle of effectiveness means that a claim for damages for infringement of the key provisions of the European market abuse rules may not fail by virtue of the requirement of relativity. After all, these rules are intended to promote not only market integrity but also, very emphatically, investor protection.47 This interpretation is also in keeping with what is said on this subject in the Explanatory Memorandum to the Dutch Financial Supervision Act, namely that all provisions of the Dutch Financial Supervision Act are intended to protect the proprietary interests of clients. The same applies to other company stakeholders under private law, for example shareholders and bond holders.48 Although the European market abuse rules have been removed (p. 103) from the Dutch Financial Supervision Act since 3 July 2016 and now appear in a regulation that has direct effect in the Netherlands, the scope of the protection afforded by the rules has remained unchanged.

VI.  Influence of the Market Abuse Regulation on Proof of Causal Link

A.6.43  Another interesting question concerns the impact of a breach of the European market abuse rules on the proof of causal link, a universal requirement for liability in all EU Member States and far beyond.49

A.6.44  Let us first consider a judgment of the Dutch Supreme Court concerning the internet company World Online.50 That case concerned loss allegedly suffered by investors in World Online as a consequence, among other things, of a misleading prospectus published on the occasion of the company’s flotation. In brief, the (p. 104) Dutch Supreme Court held as follows. As it is often hard to prove a condicio sine qua non link (the ‘but for’ test) in relation to liability for a prospectus, the investor protection which the Prospectus Directive (2003/71/EC) is intended to provide may prove illusory in practice. Although this Directive admittedly contains detailed provisions about what information must be included in the prospectus, it does not regulate civil liability if the prospectus is misleading because it is incomplete or incorrect. It does, however, require the Member States to ensure that their laws, regulations, and administrative provisions on civil liability apply to those persons responsible for the information given in a prospectus (Article 6(2), first paragraph). According to the Dutch Supreme Court, this means that effective legal protection must be provided in accordance with the rules of national law.51 The Dutch Supreme Court also held as follows:

With a view to that effective legal protection and having regard to the protection which the prospectus rules are intended to provide for investors and potential investors against misleading information in the prospectus, the basic principle should be that a condicio sine qua non link (‘but for’ link) must exist between the misleading information and the decision to invest. This means that it must be assumed, in principle, that if there had been no misleading information the investor would not have proceeded with the purchase of the securities or, in the event of purchase on the secondary market, would not have done so on the same conditions. However, the court may conclude—from the submissions of the parties (either party being free to prove the correctness of the alleged facts) and any further information available—that the basic principle referred to above does not apply in the specific circumstances. This will be the case, for example, if it is shown that the investment decision was made before disclosure of the misleading information. It should be noted by the way that as professional investors have knowledge and experience of the relevant market and of analysing the available information, there will generally be more reason than in the case of retail investors to conclude that, despite the (p. 105) misleading information in the prospectus, they were not actually influenced by it in making their investment decision.52

A.6.45  In short, the Dutch Supreme Court proceeds on the assumption that the condicio sine qua non link between the misleading information and the decision to invest is present. In the case of professional investors, their knowledge and experience may warrant the conclusion that they were not actually influenced by the misleading information. In such cases, the court may apply the basic rule that the investor has the burden of proving the condicio sine qua non link.

A.6.46  A question of particular relevance in assessing the influence of the European market abuse rules on proof of causal link is whether the Dutch Supreme Court’s reasoning in the World Online case as described above can also be applied where investors suffer damage as a consequence of infringement of one or more of the key provisions of the market abuse rules. I believe that a good case could certainly be made for this, especially in relation to the prohibition of market manipulation and the requirement of public disclosure of inside information. One of the main aims of the European market abuse rules is investor protection.53 Although the European market abuse rules do not contain a provision comparable to Article 6(2) Prospectus Directive (2003/71/EC), we may assume that the European legislator intended the Member States to offer effective legal protection in relation to the market abuse rules as well. The principle of effectiveness is, after all, a fundamental principle of EU law.54 The Immofinanz judgment provides support for this idea. It is apparent from the judgment that although in the absence of EU legislation it is admittedly left to the Member States to determine the private law consequences of non-compliance with market abuse obligations they must still ensure observance of (inter alia) the principle of effectiveness. In this connection, this principle means that the conditions an investor must fulfil in order to bring a civil action against a firm that infringes a key provision of the European market abuse rules may not be such that in practice success is impossible or extremely difficult.

(p. 106) A.6.47  If effective legal protection (to use the terminology of the World Online judgment) is to be provided, a good case can be made, particularly in relation to infringements of the prohibition of market manipulation and the requirement of public disclosure of inside information, for taking the causal link between the infringement of the rule and the loss or damage as the starting point, since the investor protection which the market abuse rules are intended to provide may otherwise prove illusory in practice.55 At present, however, it is unclear whether the Dutch Supreme Court or other civil courts would adopt this approach. Naturally, other approaches that help the client in proving a causal link may also be in keeping with the principle of effectiveness.56

VII.  Are the Courts Obliged to Apply the Market Abuse Regulation of their Own Motion?

A.6.48  This brings me, finally, to what I regard as an intriguing question that has a bearing on the intensity with which the European market abuse rules impact private law. Are the civil courts obliged to determine of their own motion whether the European market abuse rules have been infringed? I would certainly not wish to exclude this possibility in advance.

A.6.49  It is apparent from the settled case law of the CJEU that the national courts must determine of their own motion whether, on the basis of the European principle of effectiveness, unreasonably onerous clauses in contracts between businesses and consumers are ‘unfair’ within the meaning of Directive 93/13/EEC. The Court of Justice may also direct the civil courts to determine of their own motion whether the legislation is applicable.57

A.6.50  Indeed, it would seem to be extending the protection to the entire field of consumer protection directives. Recently, the Court of Justice gave such a direction in the case of the consumer purchases directive.58 In any event, the key provisions (p. 107) of the European market abuse rules can, in my view, be treated as consumer protection provisions in so far as they must be observed in relation to private investors.59 National civil courts should in that case determine of their own motion whether there has been an infringement of the key provisions of the market abuse rules in disputes between infringers and private investors.

VIII.  Proof of Failure by Civil Parties to Provide Prompt Public Disclosure of Inside Information

General

A.6.51  As already noted in the introduction, in the Netherlands, a failure to provide prompt public disclosure of inside information often serves as a basis for liability claims against issuers and even their directors.60 This path does not appear to be very popular in the other Member States of the EU, at least for the time being. In Dutch legal practice, when bringing a claim for damages against an issuer, investors often support their case by citing the fact that the AFM has imposed an administrative fine on the issuer for breach of the disclosure obligation. They may also invoke (i) the investigation report produced for the Enterprise Court in the context of an investigation procedure, or (ii) the final decision of the Enterprise Court in which it provides a description of and/or makes a declaratory ruling on the issuer’s communication policy, for example that it amounts to mismanagement.61

(p. 108) Imposition of fine by the AFM

A.6.52  A decision by the AFM to impose a fine will generally be a fairly major element of proof in civil proceedings. After all, a decision of this kind may be imposed only if the AFM has found that the obligation of prompt public disclosure of inside information has been infringed. To be able to determine whether such an infringement has taken place, the AFM has extensive investigative powers which a civil party does not possess.62 Investors may request the AFM to take enforcement action and thus ‘elicit’ the imposition of a fine. In principle, the AFM must make any such decision public, including the reasons for the decision (section 1:97 et seq. Dutch Financial Supervision Act). In the Fortis case, the AFM imposed fines on Fortis for infringing the prohibition of market manipulation and failing to make prompt public disclosure of inside information. This decision was contested by Fortis all the way up to the highest Dutch administrative court (the Trade and Industry Appeals Tribunal/CBB), albeit in vain.63

A.6.53  Strictly speaking, however, the civil courts are not bound by a decision of the AFM or by the ruling of an administrative court to which the AFM’s decision has been referred for judicial review. In civil proceedings the AFM’s decision or a ruling on it by an administrative court has whatever evidentiary value the court gives it. Nonetheless, a decision of the AFM or a ruling on it by an administrative court will, in practice, have persuasive authority.64

The Dutch company investigation procedure

General

A.6.54  For an international readership the Dutch company investigation procedure needs some explanation. To provide this, I will discuss the investigation procedure in the Fortis case. For the general background to the Fortis case, see paragraphs A.6.07 ff above.65

A.6.55  The aim of the procedure is allow a company’s affairs to be investigated with a view to a possible reorganization, restoration of sound intra-company relations, proper disclosure and, where applicable, allocation of responsibility for any mismanagement. The possibility of instituting an investigation also has (p. 109) preventive effect.66 Where a procedure is requested solely to resolve a pecuniary dispute (for example, whether the company and its directors are liable for loss or damage suffered), the application is not admissible; and where a procedure is requested to resolve a pecuniary dispute as well as one or more of the other matters referred to above but the reasoning is not plausible, the application is admissible but should be refused.67 In practice, these limitations are scarcely an impediment to the successful institution of an investigation procedure.68 Indeed, the investigation procedure regularly serves as a prelude to liability proceedings.69

A.6.56  The following are competent to apply for an investigation into the affairs of a private or public company: (i) shareholders (provided that they fulfil, individually or together, strict absolute or relative capital requirements); (ii) the company itself (represented by the managing board, supervisory board or non-executive directors) and, in the event of the company’s bankruptcy, its liquidator; (iii) an employees’ association, provided that certain requirements are met; (iv) persons granted this power in the articles of association or in an agreement with the company; (v) the Advocate General at Amsterdam Appeal Court Public Prosecution Office in cases where an investigation would be in the public interest.70

(p. 110) A.6.57  As the shareholders participated in the two top holding companies Fortis and Fortis SA/NV through a so-called twinned share arrangement,71 they remained shareholders despite the nationalization (which took place at a lower level) and were therefore fully able in that capacity to apply for an investigation into Fortis pursuant to Article 2:346, opening words and (b), DCC.72 Represented in part by the Association of Stockholders (VEB), this is what they did.73

The investigation phase

A.6.58  The investigation procedure consists of two separate phases. In the first phase the Enterprise Court decides whether there should be an investigation into the policy and affairs of a legal person (Article 2:345(1) DCC). It grants the application only if there are good reasons for doubting the correctness of the policy (or affairs) of the company (Article 2:350(1) DCC).74 In the case of Fortis, this criterion was met.75 The Enterprise Court then appoints one or more external, independent investigators who have practical experience and whose task is to establish the facts concerning the company’s policy and affairs (Article 2:345(1) DCC).76 For this purpose they have far-reaching investigative powers. They are entitled, for example, to inspect the accounts and records of the company, and the directors, supervisory and non-executive directors, and other officers of the company have a duty to furnish them with information (Article 2:351(1) DCC).

A.6.59  The first phase of the investigation concludes when the investigation report is deposited at the registry of Amsterdam Court of Appeal (Article 2:353(1) DCC). (p. 111) It is by no means uncommon for these investigation reports to be very lengthy. The report of the Fortis investigation had no less than 582 pages, excluding the appendices. In the case of Fortis, the Enterprise Court decided that the report and three appendices should be open to public inspection. The remaining appendices could be inspected only by interested parties.77

A.6.60  In view of the above, an investigation report prepared by investigators for the Enterprise Court as part of an investigation procedure is clearly eminently suitable for use as evidence in substantiating an allegation that an issuer has failed to provide prompt public disclosure of inside information.78 However this may be, in the case of Fortis a group of investors did not await publication of the investigation report and instead brought liability proceedings against Fortis and its directors and policy-makers before Utrecht District Court, with partial success.79 When framing its judgment, Utrecht District Court already had the investigation report in its possession, but did not consider it necessary to await the final decision of the Enterprise Court, which was published less than two months after (p. 112) the court’s judgment. In establishing the facts of the case, Utrecht District Court did, however, base its reasoning on the public part of the investigation report.80

Determination of mismanagement

A.6.61  The second phase (referred to in Article 2:355 DCC) starts once the investigation report is deposited at the court registry. In the second phase the initiative lies with the Enterprise Court itself, which is required to assess—assuming that a request to this effect has been made—on the basis of the investigation report whether there has been mismanagement. In its final decision on Fortis, the Enterprise Court described its task as follows (as noted previously):

The Enterprise Court should assess whether the investigation report shows that the acts or omissions of Fortis, its constituent organs or those who staffed them constituted mismanagement as alleged by the VEB and others. This will be the case if the acts or omissions of Fortis were negligent or so serious as to be contrary to fundamental principles of responsible business practice.81

A.6.62  The Enterprise Court came to the conclusion that the report prepared by the investigators appointed by it showed evidence of mismanagement by the Dutch company Fortis NV in the period from September 2007 to September 2008 in respect of (i) the implementation of its solvency planning in 2008, (ii) the disclosure of information about its subprime portfolio in the issue prospectus published on 24 and 25 September 2007 and the trading update, and (iii) its communication policy in the same period.82

A.6.63  After finding that mismanagement occurred, the Enterprise Court may—but is not bound to—take measures based on the investigation report.83 In the case of Fortis the Enterprise Court not only held that the report showed evidence of mismanagement but also acted to quash the resolution passed by the general meeting of shareholders in which the directors were discharged from liability for the policy they had pursued in 2007, in so far as the discharge related to the provision of information about Fortis’s subprime portfolio (and the risks it entailed) (p. 113) in the issue prospectus published on 24 and 25 September 2007 and the trading update.84

A.6.64  The Enterprise Court’s assessment that an issuer has been guilty of mismanagement is probably of less value in civil liability proceedings.85 As is apparent from the above, the concept of ‘mismanagement’ as referred to in Article 2:355(1) DCC has its own very specific meaning. Mismanagement does not in itself imply liability. In liability proceedings the facts established by the Enterprise Court are not assumed proven in advance, not even subject to proof to the contrary. However, a finding by the Enterprise Court that there has been mismanagement may be accorded some evidential value in the proceedings. The court hearing the liability proceedings can hold that it has been proven in advance that the person concerned failed to properly perform his duties to the legal person, taking into account the investigation report and the debate conducted about this in the second phase of the investigation.86

Proving claims for damages under the Market Abuse Regulation

A.6.65  Whatever the case may be, proving claims for damages for a failure to provide prompt public disclosure of inside information will be a good deal easier under the Market Abuse Regulation. This will work as follows in practice in the Netherlands.

A.6.66  Under the Market Abuse Regulation an issuer is obliged (i) to keep a careful record of internal decisions on inside procedures, and (ii) to draw up and, on request, produce an explanation of any decision it takes to delay disclosure, with explicit mention of the persons responsible for the decision.87

A.6.67  An investor who feels prejudiced by the lack of disclosure may try to obtain the information by requesting the AFM to enforce the provisions. He may do so by lodging an objection to a refusal by the AFM and then, in the context of the administrative law procedure, request leave to inspect the documents in the action, including the explanatory notes.88 However, the investor must then be (p. 114) designated as an interested party (belanghebbende) under Dutch administrative law, but that would seem to be reasonable.89

A.6.68  Quite apart from this, every investor who claims to have been prejudiced may also try to obtain access to the records by bringing a claim under Article 843a of the Dutch Code of Civil Procedure (obligation to produce exhibits) in order to strengthen his case. The existence of this evidence may be assumed, given the fact that the obligation to keep records is defined so explicitly in the EU legislation. The investor is therefore able to state with sufficient certainty what data he wishes to inspect.90

IX.  Conclusion

A.6.69  The last word has not been spoken about the effect of the Market Abuse Regulation on private law. The Market Abuse Regulation—like the (former) Market Abuse Directive (2003/6/EC)—says nothing about this. Although the judgments in the Immofinanz, Genil, and Nationale-Nederlanden cases make the contours rather clearer, a number of important questions have not yet been explicitly answered by the CJEU. Further decisions of the CJEU must be awaited for more definite answers. Despite these uncertainties, the number of civil actions for breach of market abuse provisions, particularly for failure to provide prompt public disclosure of inside information, is not expected to diminish, at any rate in the Netherlands. The Market Abuse Regulation is of great assistance to aggrieved investors in obtaining evidence to support their case.

Footnotes:

1  It should be noted, however, that the European legislator in fact regards the public disclosure obligation not as a key provision but mainly as an ancillary (or ‘flanking’) measure. This is evident, for example, from the fact that the Community obligation to introduce criminal sanctions is limited to the prohibition of insider dealing, the prohibition of unlawful recommendation and disclosure and the prohibition of market manipulation. The Dutch government clearly sees this differently. It regards the obligation to provide public disclosure of inside information as a key provision which is of the same level of importance as the three prohibitions just mentioned. See D R Doorenbos, ‘Openbaarmaking van voorwetenschap onder de Verordening Marktmisbruik’ Ondernemingsrecht 2016/83 para 5 (with further references).

2  Article 6:162(2) DCC reads as follows: ‘As a tortious act is regarded a violation of someone else’s right (entitlement) and an act or omission in violation of a duty imposed by law [italics added by the author] or of what according to unwritten law has to be regarded as proper social conduct, always as far as there was no justification for this behaviour’. Translation taken from http://www.dutchcivillaw.com/civilcodebook066.htm.

3  See recently Amsterdam Court of Appeal (11 November 2014) JOR 2015/71, with note by Hoff (VEB v Super de Boer); Amsterdam Court of Appeal (29 July 2014) JOR 2014/300, with note by Doorenbos (VEB v Fortis); Midden-Nederland Court (27 July 2016) ECLI:NL:RBMNE:2016:4094 (VEB v Ziggo). With regard to the liability of directors for failure to provide prompt public disclosure of inside information see Utrecht District Court (15 February 2012) ECLI:NL:RBUTR:2012:BV3753, JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/51, with note by De Jong; AA 2012/744, with note by Raaijmakers; NTBR 2012/37, with note by Arons (X v Votron and Others) paras 4.40, 4.51.

4  See eg for Germany: A Hellgardt, ‘Europarechtliche Vorgaben für die Kapitalmarkt informationshaftung—de lege lata und nach Inkrafttreten der Marktmissbrauchverordnung’ Aktiengesellschaft 5/2012, 154–68; D Poelzig, ‘Private enforcement im deutschen und europäischen Kapitalmarktrecht’ ZGR 2015, 801–48. See eg for the UK: P L Davies, S Worthington, and E Micheler, Gower’s Principles of Modern Company Law (10th edn, Sweet & Maxwell 2016) paras 26.24, 16.29, 30.7–30.10, 30.53, 30.55.

5  See under Dutch law art 6:162(2) DCC: ‘As a tortious act is regarded a violation of someone else’s right (entitlement) and an act or omission in violation of a duty imposed by law [italics added by the author] or of what according to unwritten law has to be regarded as proper social conduct, always as far as there was no justification for this behaviour.’ Translation taken from http://www.dutchcivillaw.com/civilcodebook066.htm.

6  As referred to in art 6:162(2) (last words) DCC: ‘As a tortious act is regarded a violation of someone else’s right (entitlement) and an act or omission in violation of a duty imposed by law or of what according to unwritten law has to be regarded as proper social conduct, always as far as there was no justification for this behaviour [italics added by the author]’. Translation taken from http://www.dutchcivillaw.com/civilcodebook066.htm.

7  The corresponding provision of the (former) Market Abuse Directive (2003/6/EC) was implemented in Dutch law in s 5:25i of the Dutch Financial Supervision Act until 3 July 2016 and prior to this in s 5:59 of the Dutch Financial Supervision Act. When the Transparency Directive was transposed on 1 January 2009 into ch 5.1A of the Dutch Financial Supervision Act (rules for the provision of information by issuers), the public disclosure obligation was moved from s 5:59 to s 5:25i of the Dutch Financial Supervision Act. With regard to the private law consequences of a breach of the public disclosure obligation under Dutch liability law see G T J Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ in D Busch, C J M Klaassen, and T M C Arons (eds), Aansprakelijkheid in de financiële sector (Serie Onderneming en Recht vol 78, Kluwer 2013) 711–72.

8  Until 3 July 2016, the corresponding provision of the (former) Market Abuse Directive (2003/6/EC) was implemented in the Netherlands in s 5:58 of the Dutch Financial Supervision Act.

9  See also T M C Arons and D Busch, ‘Bestuurdersaansprakelijkheid bij schending van financieelrechtelijke toezichtregels’ (2016) WPNR 7125 893–906 at 902 (no 44); Utrecht District Court (15 February 2012) ECLI:NL:RBUTR:2012:BV3753, JOR 2012/243, with notes by J H M Willems; Ondernemingsrecht 2012/51 B J de Jong; AA20120744 M J G C Raaijmakers; NTBR 2012/37 T.M.C. Arons (X v Votron and Others) paras 4.40 and 4.51.

10  Incorporated in Dutch legislation until 3 July 2016 in s 5:58 of the Dutch Financial Supervision Act, by way of implementation of the equivalent provision of the (former) Market Abuse Directive (2003/6/EC).

11  See Arons and Busch, ‘Bestuurdersaansprakelijkheid bij schending van financieelrechtelijke toezichtregels’ (n 9) 900 (no 32); L Timmerman, ‘Beginselen van bestuurdersaansprakelijkheid’ (2016) WPNR 7105 no 23. But see also Utrecht District Court (15 February 2012) ECLI:NL:RBUTR:2012:BV3753, JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/51, with note by de Jong; AA20120744, with note by Raaijmakers; NTBR 2012/37, with note by Arons (Kortekaas and Others v Votron and Others) paras 4.7 and 4.49.

12  Dutch Supreme Court (30 September 2016) ECLI:NL:HR:2016:2213.

13  With regard to the collapse of ABN AMRO see J Smit, De Prooi. Blinde trots breekt ABN AMRO (Prometheus 2008). See also the stage play and three-part TV series (both dramatized) based on this book. With regard to the fall of Fortis see P Depuydt, De kloof. Hoe de breuk tussen Belgen en Nederlanders Fortis fataal werd (Prometheus 2010). For a list of law suits in the Netherlands and Belgium see Annual Report Ageas 2015, 209–13 https://www.ageas.com/en/text/annual-report-2015. Fortis was later renamed Ageas.

14  Section 5:59 (old) Dutch Financial Supervision Act is addressed to the issuer, in this case Fortis. The provision does not therefore play a role in the proceedings against the State of the Netherlands. Following the transposition of the Transparency Directive into ch 5.1A of the Dutch Financial Supervision Act (rules for the provision of information by issuers) on 1 January 2009, the duty of public disclosure was transferred from s 5:59 Dutch Financial Supervision Act to s 5:25i Dutch Financial Supervision Act. Since 3 July 2016 this duty has been contained in art 17 Market Abuse Regulation.

16  Amsterdam Court of Appeal (29 July 2014) ECLI:NL:GHAMS:2014:3005, JOR 2014/300, with note by Doorenbos, paras 4.2.16–4.2.17.

17  Opinion of Advocate General Timmerman (25 March 2016) ECLI:NL:PHR:2016:163 no 3.112.

18  The AFM is the Dutch business conduct regulator for the financial services industry.

19  Opinion of Advocate General Timmerman (25 March 2016) ECLI:NL:PHR:2016:163 no 3.112.

20  Article 6:162(2) DCC reads as follows: ‘As a tortious act is regarded a violation of someone else’s right (entitlement) and an act or omission in violation of a duty imposed by law or of what according to unwritten law has to be regarded as proper social conduct, always as far as there was no justification for this behaviour [italics added by the author].’ Translation taken from http://www.dutchcivillaw.com/civilcodebook066.htm.

21  Opinion of Advocate General Timmerman (25 March 2016) ECLI:NL:PHR:2016:163 no 3.113.

22  Opinion of Advocate General Timmerman (25 March 2016) ECLI:NL:PHR:2016:163 no 3.114.

23  CJEU (19 December 2013) no C-174/12, NJ 2014/184, with note by Mok; Ondernemingsrecht 2014/71, with note by Arons; V&O 2014 no 7/8, pp. 109–14, with note by Beckers (Alfred Hirmann v Immofinanz AG).

24  CJEU (30 May 2013) no C-604/11, AA (2013) 663, with note by Busch; JOR 2013/274, with note by Busch (Genil 48 SL and Others v Bankinter SA and Others).

25  CJEU (30 May 2013) no C-604/11, AA (2013) 663, with note by Busch; JOR 2013/274, with note by Busch (Genil 48 SL and Others v Bankinter SA and Others).

26  See now also the explicit provision in art 69(2), last paragraph Markets in Financial Instruments Directive II (2014/65/EU): ‘Member States shall ensure that mechanisms are in place to ensure that compensation may be paid or other remedial action be taken in accordance with national law for any financial loss or damage suffered as a result of an infringement of this Directive or [Markets in Financial Instruments Regulation (2014/600/EU)].’ The rules implementing MiFID II will come into force on 3 January 2018. For the effect of Markets in Financial Instruments Directive II (2014/65/EU) in private law see D Busch, Chapter 20: ‘The Private Law Effect of MiFID: Genil and Beyond’ in D Busch and G Ferrarini (eds), Regulation of the EU Financial Markets: MiFID II and MiFIR (OUP 2017).

27  See now arts 5, 6, and 13 Market Abuse Regulation.

28  Recitals (4) and (5) Market Abuse Regulation.

29  Article 6:162(2) DCC reads as follows: ‘As a tortious act is regarded a violation of someone else’s right (entitlement) and an act or omission in violation of a duty imposed by law or of what according to unwritten law has to be regarded as proper social conduct, always as far as there was no justification for this behaviour [italics added by the author].’ Translation taken from http://www.dutchcivillaw.com/civilcodebook066.htm.

30  Opinion of Advocate General Timmerman (25 March 2016) ECLI:NL:PHR:2016:163 no 3.30.

31  See note 29.

32  Dutch Supreme Court (30 September 2016) ECLI:NL:HR:2016:2213.

33  See art 17(5) Market Abuse Regulation: ‘In order to preserve the stability of the financial system, an issuer that is a credit institution or a financial institution, may, on its own responsibility, delay the public disclosure of inside information, including information which is related to a temporary liquidity problem and, in particular, the need to receive temporary liquidity assistance from a central bank or lender of last resort, provided that all of the following conditions are met: (a) the disclosure of the inside information entails a risk of undermining the financial stability of the issuer and of the financial system; (b) it is in the public interest to delay the disclosure; (c) the confidentiality of that information can be ensured; and (d) the competent authority specified under para 3 has consented to the delay on the basis that the conditions in points (a), (b) and (c) are met.’

34  For more information see Arons and Busch, ‘Bestuurdersaansprakelijkheid bij schending van financieelrechtelijke toezichtregels’ (n 9) 902 (no 44); Utrecht District Court (15 February 2012) ECLI:NL:RBUTR:2012:BV3753, JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/51, with note by de Jong; AA20120744, with note by Raaijmakers; NTBR 2012/37, with note by Arons (X v Votron and Others) paras 4.40 and 4.51.

35  See Arons and Busch, ‘Bestuurdersaansprakelijkheid bij schending van financieelrechtelijke toezichtregels’ (n 9) 900 (no 32); L Timmerman, ‘Beginselen van bestuurdersaansprakelijkheid’ 2016 WPNR 7105 no 23. But see also Utrecht District Court (15 February 2012) ECLI:NL: RBUTR:2012:BV3753, JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/51, with note by de Jong; AA20120744, with note by Raaijmakers; NTBR 2012/37, with note by Arons (Kortekaas and Others v Votron and Others) paras 4.7 and 4.49.

36  Dutch Supreme Court (6 December 2013) ECLI:NL:HR:2013:1586, with note by Busch FR 2014/1, 30–35 (Ageas NV (previously Fortis NV) v VEB NCVB and Others) para 4.3.1.

37  Dutch Supreme Court (10 January 1990) NJ 1990, 466 (Ogem); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 728.

38  Enterprise Court (5 April 2012) JOR 2013/41, with note by Bulten; AA (2012) 744, with note by Raaijmakers; Ondernemingsrecht (2012) 71, with note by Bartman, para 4.2; cf Dutch Supreme Court (10 January 1990) NJ 1990, 466 (Ogem); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 790.

39  Dutch Supreme Court (6 December 2013) ECLI:NL:HR:2013:1586, FR 2014/1, 30–35, with note by Busch (Ageas NV (previously Fortis NV) v VEB NCVB and Others) para 4.3.1.

40  Dutch Supreme Court (6 December 2013) ECLI:NL:HR:2013:1586, FR 2014/1, 30–35, with note by Busch (Ageas NV (previously Fortis NV) v VEB NCVB and Others) para 4.3.3.

41  On this point see my previous notes on Dutch Supreme Court (6 December 2013) ECLI:NL:HR:2013:1586, FR 2014/1, 35 nos 22 t/m 24 (Ageas NV (previously Fortis NV) v VEB NCVB and Others).

42  CJEU (19 December 2013) no C-174/12, NJ 2014/184, with note by Mok; Ondernemingsrecht 2014/71, with note by Arons; V&O 2014 no 7/8, pp. 109–14, with note by Beckers (Alfred Hirmann v Immofinanz AG); CJEU (30 May 2013) no C-604/11, AA (2013) 663, with note by Busch; JOR 2013/274, with note by Busch (Genil 48 SL and Others v Bankinter SA and Others).

43  CJEU (29 April 2015) C-51/13, AA (2015) 696, with note by Busch and Arons (Nationale Nederlanden v Van Leeuwen).

44  CJEU (29 April 2015) C-51/13, AA (2015) 696, with note by Busch and Arons (Nationale Nederlanden v Van Leeuwen) para 28.

45  Directive 92/96/EEC, OJ EU L 360 (9 December 1992) 1–27. This has since been repealed and replaced by more recent versions; see CJEU (29 April 2015) C-51/13, AA (2015) 696, with note by Busch and Arons (Nationale Nederlanden v Van Leeuwen) para 3.

46  For example, the requirement of relativity in the Netherlands (relativiteitsvereiste) and the Schutznorm requirement in Germany (art 6:163 DCC and para 823 Bürgerliches Gezetsbuch, respectively).

47  See eg para 3 (market integrity) and para 8 (investor protection) Market Abuse Regulation. See also Dutch Parliamentary Papers II, 2015/16, 34 455 no 3 (Explanatory Memorandum) 1–2.

48  See Dutch Parliamentary Papers II, 2005/2006, 29 708 no 19, 393, where it is noted in a general sense that ‘[w]‌here consumers suffer damage as a consequence of a breach of a provision of this bill …, the requirement of relativity of art 6:163 DCC will also be deemed to have been complied with. One of the aims of this bill is to protect consumers from misconduct by financial undertakings’. For this purpose, the term consumer must be broadly interpreted. Basically, it means anyone who obtains financial services, ie anyone who is a ‘client’, whether in a private or non-private capacity. This interpretation is confirmed, for example, by the paragraph in the legislative history of the Dutch Financial Supervision Act prior to the passage just quoted above, where reference is made to ‘consumers or other contacts of financial undertakings under private law’. Whatever the case, it is apparent from the Dutch legislative history that whether the rule that has been infringed is a rule of prudential supervision or a rule of market conduct supervision is immaterial to the application of the requirement of relativity. All provisions of or under the Dutch Financial Supervision Act are intended to protect the proprietary rights of clients and other contacts of financial undertakings under private law. This interpretation is in keeping with other passages from the legislative history of the Dutch Financial Supervision Act, where it is noted that the prudential supervision by the Dutch central bank (DNB) is performed not only in the public interest but also in order ‘to protect those obtaining services offered or provided by the financial undertakings concerned’. Similarly, the market conduct supervision by the AFM is performed not only in the public interest but also to protect the proprietary rights of ‘clients’. With regard to prudential supervision see Dutch Parliamentary Papers II 2003–2004, 29 708 no 3 (Explanatory Memorandum), pp. 28–29. The fact that prudential supervision is intended to protect the proprietary rights of policy holders (a species of the genus client) is also apparent from Dutch Supreme Court judgment HR (13 October 2006) NJ 2008/529, with note by Van Dam; JOR 2006/295, with note by Busch; JA 2007/2, with note by Van Boom (DNB v Stichting Vie d’Or) para 4.2.2. With regard to market conduct supervision see Dutch Parliamentary Papers II 2003/04, 29 708 no 3 (Explanatory Memorandum) 29. With regard to the relativity requirement in relation to infringements of market abuse rules see also Utrecht District Court (15 February 2012) JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/267, with note by De Jong; NTBR 2012/262, with note by Arons. Finally, the principle described above can be extended to cover investors who are solely contractual counterparties (and hence not clients) of a financial undertaking. If supervision rules are infringed in this situation, the relativity requirement is also automatically fulfilled. For a detailed consideration of how this relates to infringement of the requirement of prompt public disclosure of inside information see Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 756–9.

49  See first and foremost the all-time classic of H L A Hart and Tony Honoré, Causation in the Law (2nd edn, Oxford University Press 1985). See, more recently, Michael S Moore, Causation and Responsibility: An Essay in Law, Morals, and Metaphysics (Oxford University Press 2009).

50  Dutch Supreme Court (27 November 2009) NJ 2014/201, with note by Du Perron; AA (2010) 336, with note by Raaijmakers; JOR 2010/43, with note by Frielink (Vereniging van Effectenbezitters and Others v World Online International NV).

51  See Dutch Supreme Court (27 November 2009) NJ 2014/201, with note by Du Perron; AA (2010) 336, with note by Raaijmakers; JOR 2010/43, with note by Frielink (Vereniging van Effectenbezitters and Others v World Online International NV) para 4.11.1. For the record, it should be noted that the Prospectus Directive has subsequently been amended as a consequence of Directive 2010/73/EU. The changes had to be transposed into national law by 1 July 2012 at the latest (art 3, Directive 2010/73/EU). This was achieved in the Netherlands. For a detailed discussion of the obligation to publish a prospectus see K A Kralj, De prospectusplicht (FR 10 Kluwer 2012). Directive 2010/73/EU does not make any changes to art 6(2), first paragraph, of the Prospectus Directive. However, the text of art 6(2), second paragraph, has been supplemented. The text in italics below is the addition made by Directive 2010/73/EU: ‘However, Member States shall ensure that no civil liability shall attach to any person solely on the basis of the summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus, or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities. The summary shall contain a clear warning to that effect [italics added by the author].’ From 21 July 2019 onwards the bulk of the new Prospectus Regulation will directly apply in the Member States, at which point national implementation of the current Prospectus Directive can cease. See art 49(2) of Regulation (EU) 2017/1129, OJ L 168, 30 June 2017, pp. 12–82 (Prospectus Regulation). The text of art 6 Prospectus Directive can be found in art 11 of the Prospectus Regulation.

52  See Dutch Supreme Court (27 November 2009) NJ 2014/201, with note by Du Perron; AA (2010) 336, with note by Raaijmakers; JOR 2010/43, with note by Frielink (Vereniging van Effectenbezitters and Others v World Online International NV) para 4.11.2. With regard to this aspect of the judgment see A C W Pijls and W H van Boom, ‘Handhaving prospectusaansprakelijkheid niet illusoir: vermoeden van causaal verband bij prospectusaansprakelijkheid’ (2010) WPNR 6834, 194–200, 196–7; B J de Jong, ‘Liability for Misrepresentation: European Lessons on Causation from the Netherlands’ (2011) European Company and Financial Law Review 352, 364–6.

53  See recitals (3) (market integrity) and (8) (investor protection) Market Abuse Regulation. See also Dutch Parliamentary Papers II, 2015/16, 34 455 no 3 (Explanatory Memorandum) 1–2.

54  Regarding the question of how the principle of effectiveness affects the impact of EU law on private law in a general sense see for example: A S Hartkamp, European Law and National Private Law. Effect of EU Law and European Human Rights Law on Legal Relationships between Individuals (2nd edn, Intersentia 2016) 98–116; T Tridimas, The General Principles of EU Law (Oxford University Press 2006) 418–76; W van Gerven, ‘Of Rights, Remedies and Procedures’ (2000) Common Market Law Review 501.

55  See also B J de Jong, Schade door misleiding op de effectenmarkt (dissertation Radboud University, VHI series vol 103 Kluwer 2010) 271–2; Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 760–70, both of which refer to the Transparency Directive and the obligation of prompt public disclosure of inside information under the (former) Market Abuse Directive (2003/6/EC).

56  With regard to the last point see C J M Klaassen, ‘Bewijs van causaal verband tussen beweerdelijk gelden beleggingsschade en schending van een informatie- of waarschuwingsplicht’ in D Busch, C J M Klaassen, and T M C Arons (eds), Aansprakelijkheid in de financiële sector (Serie Onderneming en Recht, vol 78 Kluwer 2013) 127–74, 151.

57  See CJEU (26 October 2006) no case 168/05, NJ 2007/201, with note by Mok (Mostaza Claro); CJEU (4 June 2009) no case 243/08, NJ 2009/395, with note by Mok (Pannon); CJEU (6 October 2009) no case 40/08, NJ 2010/11 (Asturcom); CJEU (30 May 2013) NJ 2013/487, with note by Mok (Asbeek Brusse and De Man Garabito); CJEU (28 July 2016) no case 168/15, AA 2016/658, with note by Hartkamp (Milena Tomášová v Ministerstvo spravodlivosti SR ea).

58  See CJEU (3 October 2013) no case 32/12, AA 2015/222, with note by Hartkamp (Soledad Duarte Hueros v Autociba); CJEU (4 June 2014) no case 497/13, Ars Aequi 2015/816, with note by Hartkamp (Froukje Faber v Autobedrijf Hazet Ochten BV). See also A Ancery and B Krans, ‘Ambsthalve toepassing van consumentenrecht: grensbepaling en praktische kwesties’ (2016) Ars Aequi 825.

59  One of the main aims of the European market abuse rules is investor protection. See recital (8) Market Abuse Regulation. See also Dutch Parliamentary Papers II, 2015/16, 34 455 no 3 (Explanatory Memorandum) 1–2.

60  See recently Amsterdam Court of Appeal (11 November 2014) JOR 2015/71, with note by Hoff (VEB v Super de Boer); Amsterdam Court of Appeal (29 July 2014) JOR 2014/300, with note by Doorenbos (VEB/Fortis); Midden-Nederland Court (27 July 2016) (ECLI:NL:RBMNE: 2016:4094) (VEB v Ziggo). With regard to the liability of directors for failure to provide prompt public disclosure of inside information see Utrecht District Court (15 February 2012) ECLI: NL:RBUTR:2012:BV3753, JOR 2012/243, with note by Willems; Ondernemingsrecht 2012/51, with note by De Jong; AA 2012/744, with note by Raaijmakers; NTBR 2012/37, with note by Arons (X v Votron and Others) paras 4.40, 4.51. As public disclosure is an obligation that is binding only on the issuer (unlike, for example, the prohibition of market manipulation which applies to everyone), the director who is in actual control of this conduct acts by definition in his capacity of director of the issuer. According to the prevailing doctrine, the requirement of serious personal culpability of the director applies in full under Dutch law. For more detail see Arons and Busch, ‘Bestuurdersaansprakelijkheid bij schending van financieelrechtelijke toezichtregels’ (n 9) 902 (no 44).

61  Cf Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 743.

62  Examples are the power of the AFM to obtain information (s 1:74 Dutch Financial Supervision Act) and the supervisory powers of the AFM’s staff, such as the power to demand information (s 5:16 General Administrative Law Act), the power to inspect business data and papers (s 5:17 General Administrative Law Act), and the duty of the issuer to cooperate (s 5:20 General Administrative Law Act).

63  CBB (4 March 2014) ECLI:NL:CBB:2014:67, JOR 2014/133, with note by Stevens (Ageas v AFM).

64  See also Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 747–8.

65  See para III.3.2.

66  Dutch Supreme Court (10 January 1990) NJ 1990, 466 (Ogem); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 728.

67  Dutch Supreme Court (18 November 2005) NJ 2006, 173; JOR 2005/295 (Unilever); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 728.

68  Cf B Winters and P N Ploeger, ‘Kroniek Enquêterecht’ in M Holtzer, A F J A Leijten, and D J Oranje (eds), Geschriften vanwege de Vereniging Corporate Litigation 2006-2007 (Serie vanwege het Van der Heijden Instituut, vol 93 Kluwer 2007) 11–47, 18–21; Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 728.

69  Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 442; for example see also Willems in his note no 1 to the judgment of Utrecht District Court (15 February 2012) JOR 2012/243 (Kortekaas and Others v Lippens and Others).

70  See arts 2:345–347 DCC, as these provisions have read since 1 January 2013 as a consequence of the Investigation Right (Amendment) Act (Bulletin of Acts and Decrees 2012, 274). This amending legislation has introduced stricter requirements to be fulfilled by providers of capital to large companies and listed companies in order to be able to apply for an investigation (art 2:346(1)(c) DCC). As a result, activist shareholders will find it harder to request an investigation into large companies and listed companies. It should be noted that the access threshold can be set lower in the articles of association. At the time when the Fortis investigation was requested, the statutory requirements were less strict. The right of the company itself and, in the event of its bankruptcy, its liquidator to apply for an investigation (arts 2:346(1)(d) and 2:346(3) DCC respectively) was introduced on 1 January 2013 when the Investigation Right (Amendment) Act referred to above came into force. These possibilities did not therefore yet exist at the time of the application for the Fortis investigation. With regard to the amendments see eg P van Schilfgaarde, J Winter, and J B Wezeman, Van de BV en de NV (16th edn, Kluwer 2013) no 117. For a more detailed account of the amending legislation in its draft form see A F J A Leijten and M P Nieuwe Weme, ‘Het wetsvoorstel aanpassing enquêterecht’ in M Holtzer, A F J A Leijten, and DJ Oranje (eds), Geschriften vanwege de Vereniging Corporate Litigation 2011-2012 (Serie vanwege het Van der Heijden Instituut, vol 112 Kluwer 2012) 123–73.

71  Shareholdership in the Fortis Group took the form of a ‘twinned share’. Under the articles of association of both Fortis SA/NV and Fortis, a share in either of these companies could be issued, subscribed for, cancelled, and encumbered only together with a share in the other company, this being in the form of a unit. A unit consisted of an ordinary share in Fortis SA/NV and an ordinary share in Fortis. The Fortis share compiled in this way was listed on the stock exchange of Euronext Amsterdam NV. See, for example, Enterprise Court (24 November 2008) JOR 2009/9, with note by Josephus Jitta, para 2.2.

72  As this provision read prior to 1 January 2013, ie prior to the date on which the Investigation Right (Amendment) Act (Bulletin of Acts and Decrees 2012, 274) came into force. Now they would have to make an application under art 2:346(1), opening words and (c), DCC. Please note that in the meantime the Dutch Supreme Court has ruled that even shareholders who lost ownership of their shares owing to a nationalization of the relevant company may have capacity to apply for an investigation. See Dutch Supreme Court (4 November 2016) ECLI:NL:HR:2016:2456 (Netherlands and Others v Association of Stockholders (VEB) and Others) para 3.

73  The VEB does not have an independent power to apply for an investigation. Although, during the recent revision of the law on company investigations, proposals were made for lobbying organizations within the meaning of art 3:305a DCC—and hence the VEB too—to be given this power, the proposal was not adopted. See Dutch Parliamentary Papers II 2010/11, 32 887 no 3 (Explanatory Memorandum) 17.

74  The words ‘or correct state of affairs’ were added to art 2:350(1) DCC with effect from 1 January 2013 as a consequence of the entry into force of the Investigation Right (Amendment) Act (Bulletin of Acts and Decrees 2012, 274). These words did not therefore appear in the provision as it read at the time of the application for the Fortis investigation.

75  See Enterprise Court (24 November 2008) JOR 2009/9, with note by Josephus Jitta.

76  Three investigators were appointed in the Fortis case.

77  See Enterprise Court (16 June 2010) ECLI:NL:GHAMS:2010:BM8183 (depositing of Fortis investigation report) para 3. The appendices form an integral part of the investigation report. In any event the Advocate General at Amsterdam Court of Appeal, the legal person itself, and the applicants and their lawyers receive a copy of the report (art 2:353(2) DCC). If the legal person, as in this case, is subject to the supervision of the Dutch central bank (DNB), the bank too receives a copy (art 2:353(2) in conjunction with art 2:348 DCC). Since 1 January 2013 (following the entry into force of the Investigation Right (Amendment) Act referred to above), the AFM has also been entitled to receive a copy if the legal person is subject (or partially subject) to its supervision (art 2:353(2) in conjunction with art 2:348 DCC). The major banks in the Eurozone have come under the direct supervision of the European Central Bank (ECB) in November 2014. It would therefore be logical to add the ECB in art 2:353 (2) and 2:348 DCC. The Enterprise Court may also determine that all or part of the report will be available for inspection by other persons designated by it or by everyone (art 2:353(2) DCC). As most of the appendices, as noted in the main body of the text, are available for inspection only by interested parties, the VEB requested the Enterprise Court to authorize it pursuant to art 2:353(3) DCC to divulge information to third parties from these appendices to which access is restricted. The VEB needed this authorization in order to be able to use these appendices in a law suit which at the time was pending before the Amsterdam District Court. In these proceedings, Fortis, a number of former directors of Fortis, and banks involved in the issue of shares announced on 21 September 2007 had been sued by Fortis which, in its capacity of representative of the interests of other persons within the meaning of art 3:305a DCC, had requested the Court to give a declaratory ruling that the defendants acted unlawfully in a number of respects and that they are liable for the loss and damage suffered as a result by everyone who acquired shares in Fortis in the relevant period. The Enterprise Court granted this authorization; see Enterprise Court (6 November 2013) ECLI:NL:GHAMS:2013:4745. As regards the first phase of the investigation procedure see Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) nos 730, 774–789.

78  Cf Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 747–8.

79  Utrecht District Court (15 February 2012) JOR 2012/243, with note by Willems; Ondernemingsrecht (2012) 51, with note by De Jong; NTBR (2012) 37, with note by Arons (Kortekaas and Others v Lippens and Others). See also Amsterdam Court of Appeal (29 July 2014) ECLI:NL:GHAMS:2014:3005, JOR 2014/300, with note by Doorenbos (Stichting Fortis Effect and Others v State of the Netherlands and Ageas (previously Fortis)).

80  On this point see also Willems in his note no 3 to the judgment of Utrecht District Court (15 February 2012) JOR 2012/243 (Kortekaas and Others v Lippens and Others).

81  Enterprise Court (5 April 2012) JOR 2013/41, with note by Bulten; AA (2012) 744, with note by Raaijmakers; Ondernemingsrecht (2012) 71, with note by Bartman, para 4.2; cf Dutch Supreme Court (10 January 1990) NJ 1990, 466 (Ogem); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 790.

82  Enterprise Court (5 April 2012) JOR 2013/41, with note by Bulten; AA (2012) 744, with note by Raaijmakers; Ondernemingsrecht (2012) 71, with note by Bartman, para 7.

83  See Dutch Supreme Court (27 September 2000) NJ 2000, 653; JOR 2000/217 (Gucci); Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) no 730. The judgment in Dutch Supreme Court (18 April 2003) JOR 2003/110, with note by Blanco Fernandez, para 3.3, shows, incidentally, that in finding that there has been mismanagement the Enterprise Court need not rely solely on the investigation report, but can base its findings in part on what has been submitted or found in the proceedings themselves. Cf Bulten in her note 5 to Enterprise Court (5 April 2012) JOR 2013/41.

84  Enterprise Court (5 April 2012) JOR 2013/41, with note by Bulten; AA (2012) 744 with note by Raaijmakers; Ondernemingsrecht (2012) 71, with note by Bartman, para 7.

85  See also Hoff, ‘Aansprakelijkheid bij niet-naleving van de openbaarmakingsplicht van koersgevoelige informatie’ (n 7) 748.

86  Dutch Supreme Court (8 April 2005) NJ 2006/443, with note by Van Solinge; JOR 2005/119, with note by Brink (Laurus) paras 3.8 and 3.9; Asser-Maeijer/Van Solinge/Nieuwe Weme 2-II* (2009) nos 442–444, 799.

87  Article 17(4) Market Abuse Regulation in conjunction with arts 4 and 5 Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, OJ EU 2016, L 173/47.

88  Cf ss 7:4 and 8:42 General Administrative Law Act (Awb).

89  Cf CBB (7 June 2012) ECLI:NL:CBB:2012:BW7748, JOR 2012/254, with note by Affourtit and Van den Broek (AFM and Others v Trafalgar Asset Managers and Others) para 5.

90  Cf in this connection Dutch Supreme Court (26 October 2012) JOR 2013/30, with note by Jansen. For further references on this subject see D R Doorenbos, ‘Openbaarmaking van voorwetenschap onder de Verordening Marktmisbruik’ Ondernemingsrecht 2016/83 para 5 in conjunction with para 4.7.