The AMF Enforcement Committee fines Pharnext and its former directors a total of €800,000
Executive Summary
The AMF Enforcement Committee fined Pharnext €500,000 and its former directors Daniel Cohen (€200,000) and David Horn Solomon (€100,000) on 20 January 2025 for failing to disclose inside information promptly and disseminating false or misleading information about FDA interactions for a drug candidate. This enforcement action reinforces AMF's strict stance on market abuse rules under EU MAR, highlighting personal liability for directors in listed biotech firms where investor expectations around product approvals are high. Compliance teams should note it as a reminder of timely disclosure obligations, especially amid appeals filed by the parties. #
What Changed
- This is not a regulatory change but an enforcement decision applying existing obligations under the Market Abuse Regulation (MAR), specifically:
- Article 17 MAR: Requirement to disclose inside information as soon as possible (breached by Pharnext's delays from 10 April 2019 and non-disclosure from 28 October 2020).
- Article 12(1)(c) MAR: Prohibition on disseminating false or misleading information that could affect market prices, via press releases and shareholder letters overstating FDA progress. No new rules introduced; it clarifies application to pre-marketin
Suggested Considerations
- Review inside information policies: Ensure protocols flag regulatory feedback (e.g., FDA requests) as inside information and mandate immediate public disclosure via official channels.
- Audit communications: Screen press releases, shareholder letters for optimistic language on approvals; implement pre-issuance legal/compliance sign-off.
- Director training: Conduct MAR-specific training on personal liability for disclosure failures; document decision trails.
- Monitor appeals: Track Paris Court of Appeal outcomes, as upheld fines could set precedents for biotech disclosures.
- wide actions mandated beyond general MAR compliance, but proactive gap analysis recommended.
Key Dates
Compliance Impact
Urgency: Medium – This is a specific enforcement (not a new rule), but it signals heightened AMF scrutiny on biotech disclosures amid investor sensitivity to approval news; delays in similar cases could trigger investigations/fines up to 15% of turnover or €15M. Matters for listed firms with pipeline dependencies, as it exemplifies director accountability and market-wide deterrence post-MAR implem
Who is Affected
References
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Summary
Sanctions & settlements professional obligations Journalists Listed companies and issuers The AMF Enforcement Committee fines Pharnext and its former directors a total of €800,000