The AMF Enforcement Committee fines a US investment fund and its director a total of €10 million for price manipulation during an initial public offering on the Nasdaq
Executive Summary
The AMF Enforcement Committee fined US-based investment fund EcoR1 Capital €7 million and its director Oleg Nodelman €3 million (total €10 million) on 13 December 2024 for price manipulation via "marking the close" trades on Euronext Paris during Innate Pharma's 2019 Nasdaq IPO, plus reporting failures on 5% ownership thresholds. This case demonstrates AMF's extraterritorial reach over foreign actors impacting French markets and underscores personal liability for executives in market abuse violations under MAR. #
What Changed
This is an enforcement decision, not a regulatory change; it reinforces existing MAR prohibitions on price manipulation (Article 12), specifically "fixing the price at an abnormal or artificial level" through timed sales at market close to influence linked ADS pricing on Nasdaq. It also highlights ongoing scrutiny of reporting obligations under Article L. 233-7 of the French Commercial Code for crossing 5% thresholds in listed companies. #
What You Need To Do
- Implement pre-trade surveillance for "marking the close" patterns, especially around issuer events like IPOs where Euronext closes influence external pricing
- Enhance 5% threshold monitoring with automated alerts and timely filings (4 trading days post-threshold)
- Conduct senior manager training on personal liability under MAR for manipulative orders benefiting the firm (e
- Review cross-border trading policies for French-listed assets, including jurisdiction assessments for non-EU funds
- Perform gap analysis on order timing controls to flag end-of-day volume spikes
Key Dates
Compliance Impact
Urgency: Medium - Matters due to AMF's aggressive fines (€10M total) and personal accountability for a US fund/director, signaling heightened cross-border enforcement on Euronext trades. Firms should prioritize surveillance upgrades now, as appeals are possible but do not suspend implications; low immediate deadline pressure but high precedent value for biotech/dual-listed scenarios.
Who is Affected
Summary
Sanctions & settlements MAR Other professionals Executive & other private individuals Listed companies and issuers The AMF Enforcement Committee fines a US investment fund and its director a total of €10 million for price manipulation during an initial public offering...