Pump-and-dump practice: market manipulation sanctioned by the Paris Tribunal Correctionnel
Executive Summary
The Paris Tribunal Correctionnel sanctioned a pump-and-dump market manipulation scheme, where perpetrators artificially inflated small-cap stock prices via social media hype before selling off, violating France's Market Abuse Regulation (MAR). This enforcement action by the AMF underscores aggressive judicial backing for anti-manipulation efforts, signaling heightened scrutiny on coordinated trading schemes, especially in illiquid assets. Compliance teams must prioritize surveillance enhancements to mitigate similar risks amid rising digital promotion tactics. #
What Changed
This is an enforcement decision rather than new legislation, reinforcing existing prohibitions under Regulation (EU) No 596/2014 (MAR) against market manipulation, including pump-and-dump tactics like false information dissemination and artificial price inflation . No novel regulatory requirements are introduced, but it exemplifies AMF's collaboration with courts for criminal sanctions, potentially increasing deterrence through public naming and fines. Related AMF General Regulation updates effective 30/06/2026 integrate MAR references and strengthen reporting of failings . #
What You Need To Do
- Enhance market abuse surveillance systems to detect coordinated trading, unusual volume spikes, and social media-driven hype in small-cap/illiquid assets
- Implement staff training on recognizing pump-and-dump indicators, such as group chats luring investors with upside promises
- Review client communications policies to block manipulative promotions; report suspicions under MAR Article L
- For crypto firms, align with "enhanced" DASP registration and MiCA AML/CFT compliance to preempt manipulation sanctions
- Conduct internal audits of trading patterns and escalate to AMF if risks identified
Key Dates
Compliance Impact
Urgency: High - This case demonstrates swift judicial enforcement (Tribunal Correctionnel conviction), amplifying personal liability for individuals in manipulation schemes and pressuring firms to bolster pre-trade/post-trade surveillance. It matters amid MiCA deadlines, as unlicensed crypto operators risk exclusion post-2026, with pump-and-dump flagged as a key abuse vector . Non-compliance invit
Who is Affected
Summary
MAR Anti-money Laundering Pump-and-dump practice: market manipulation sanctioned by the Paris Tribunal Correctionnel