The AMF Enforcement Committee fines a biotech company for failing to disclose inside information as soon as possible, and one of its co-founders and one of its shareholders for unlawful disclosure or use of inside information
Executive Summary
The AMF Enforcement Committee sanctioned a biotech company for delaying disclosure of inside information, and fined a co-founder and shareholder for unlawfully disclosing or using it, violating EU Market Abuse Regulation (MAR) obligations under Articles 7, 10, and 17. This case underscores the AMF's strict enforcement of timely public disclosure and insider handling, highlighting risks of personal liability for executives and shareholders in listed biotech firms. Compliance teams must prioritize robust information barrier procedures and insider list management to mitigate similar penalties. #
What Changed
- This enforcement action does not introduce new regulations but reinforces existing MAR requirements transposed into AMF General Regulation (e.g., Article 315-1), including:
- Immediate public disclosure: Issuers must disclose inside information "as soon as possible" under MAR Article 17, unless three conditions for delay are met (legitimate interest, confidentiality ensured, no public misleading).
- Prohibition on unlawful disclosure/use: Persons with inside information cannot disclose it except per MAR Article 10 (after informing compliance officer); investment firms must maintain "information barriers" to control circulation.
- Insider list obligations: Companies must create, update, and notify insiders of their duties (e.g., no trading or dissemination), with accurate details; failure leads to penalties as seen in related cases.
Suggested Considerations
- Assess information promptly: Determine inside information status per MAR Article 7 (precise, price-significant) and disclose via approved channels (e.g., electronic dissemination per Article 221-3 AMF GR).
- Implement controls: Establish information barriers, restrict access, and notify affected persons of rules/penalties (AMF GR Articles 223-27, 223-30).
- Maintain insider lists: Create/update lists for each inside information item, ensure insiders acknowledge MAR duties (no use/dissemination), and monitor changes.
- Train personnel: Educate executives/shareholders on disclosure prohibitions and PDMR reporting.
- Archive disclosures: Post regulated info on company website immediately and ensure AMF/DILA transmission.
- Prepare for investigations: Respond to AMF requests "as soon as possible" with full documentation to avoid fines up to €100M.
Key Dates
Compliance Impact
Urgency: High - This demonstrates AMF's willingness to impose personal and corporate fines for disclosure failures, particularly in volatile sectors like biotech where trial data qualifies as inside information. Firms risk market disruption, reputational damage, and escalating penalties (e.g., hundreds of thousands of euros in similar 2023 cases); immediate review of insider protocols is essential
Who is Affected
References
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Summary
Sanctions & settlements Journalists The AMF Enforcement Committee fines a biotech company for failing to disclose inside information as soon as possible, and one of its co-founders and one of its shareholders for unlawful disclosure or use of inside information