Einde inhoudsopgave
Cross-border Enforcement of Listed Companies' Duties to Inform (IVOR nr. 87) 2012/3.5
3.5 Persons responsible for the prospectus
mr.drs. T.M.C. Arons, datum 07-05-2012
- Datum
07-05-2012
- Auteur
mr.drs. T.M.C. Arons
- JCDI
JCDI:ADS372047:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Cf. s. 6:194(1) DCC: 'A person who makes public or causes to be made public information regarding goods or services which he, or the person for whom he acts, offers in the conduct of a profession or business, acts unlawfully if this information is misleading.' Application of s. 6:194 DCC requires that the defendant makes public the information. In its ABN Amro/Coop judgment, the Dutch Supreme Court (Hoge Raad der Nederlanden, HR) mled as follows (HR 2 December 1994, NJ 1996 (246): 'It is clear from the parliamentary papers with respect to the introduction of s. 1416a DCC (the predecessor of s. 6:194 DCC) that the notion of 'making public' in this article has a wide meaning. The act does not assume an exhaustive rulein the sense that if some form of publication was made, the republication of the same information cannot be qualified as making public. The person who makes public a text which has been composed by him, containing information which has previously been made public, also makes public the letter information in the sense of section 1416a DCC. This will not differ in a case like the one at hand as a result of the meaning given in the legai system to annual accounts of companies and the notes attached to it.' (para. 4.1). Notice that publication of the information is not a requirement in MAD. The claimant could have brought forward in the proceedings that the court had a duty to interpret the DCC in accordance with European legislation, i.e. that the court had to disregard this requirement.
Parliamentary Papers II 2007/2008, 30 928, No. 8, p. 5.
In ABN Amro/Co-op, the Dutch Supreme Court upheld the ruling of the Amsterdam Court of Appeal on the basis that the lead manager qualifies as a person who himself, in whole in part, has determined or has caused to be determined the content and presentation of the information in the prospectus. 'The parliamentary papers with respect to the introduction of ss 1416a DCC and 1416b DCC (the predecessors of ss 6:194 DCC and 6:195 DCC, respectively) as quoted by the Advocate General, demonstrate that the person who makes public a text which has been composed by him, by his choice with respect to the information to be included, is a person who himself, in whole or in part, has determined or has caused to be determined the content and presentation of that information in the sense of s. 1416b DCC, regardless whether the information included in the text originates from others. This will however differ if the person who makes public the text has stated unequivocally that certain statements in the text published were not made by him and that he cannot guarantee their correctness.' (para. 4.3).
S. 5:2 FSA.
Securities are property rights and therefore qualify as `goods' in the sense of s. 3:1 DCC. Therefore securities are deemed to be a product in the sense of the unfair commercial practices mies.
Cf. the ruling of the Amsterdam Court of Appeal in Stichting Via.claim/Fortis with respect to the person who makes public in the sense of s. 6:194 DCC. Amsterdam Court of Appeal, 7 October 2008 Stichting Via.claim/Fortis, JOR 2008 (12), paragraph 4.8. In addition, Pijls' commentary on this judgment in TOR 2008 (17), p. 636. Otherwise: Hoevers (2011), pp. 256-259.
Notice that publication and distribution of advertising and marketing with respect to the securities on offer by the issuer and the members of the issuing syndicate constitute a commercial practice (CE ss 5:20(1) and (2) FSA). If the publication and distribution of a prospectus, which has to be an unbiased informative document, constitutes a commercial practice, the advertising and marketing activities are necessarily commercial practices.
Lieverse (2010), p. 57.
Van Solinge (2000), p. 426.
Maris/Boele (1994), p. 145; Van Solinge (2000), p. 424. CE Utrecht District Court in its decision of 15 February 2012 (Kortekaas et al. v Fortis et al., LJN: BV3753) held the CEO of Fortis Bank personally liable for the losses incurred by investors as a result of the dissemination of false and misleading information and thereby violating s. 5:58(1)(d) FSA. Because of his knowledge regarding the worsening solvency of Fortis Bank, he can be personally, seriously blamed (persoonlijk ernstig verwijt) for the company disseminating misinformation to the investing public.
For an overview with respect to the liability of the accountant in an IPO process on the basis of s. 6:162 DCC, see: De Rooy (2002). For an overview of the accountant's involvement in an IPO, the applicable norms and the arising duties, I refer to Coenen (2011).
S. 6:193a(1)(d) DCC.
Before I discuss which parties in the IPO can be held liable for the publication and distribution of a misleading prospectus on the basis of the unfair commercial practices rules, we need to provide some essential definitions laid down in section 6:193a DCC. A commercial practice is defined as any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers.
This definition broadens the scope of application in comparison to the misleading and comparative advertising rules laid down in sections 6:194 and 195 DCC. Publication is no longer a requirement for application of the unfair commercial practices rules.1 Therefore, the protection of consumers has been improved.2 Whether a private placement memorandum qualifies as publication in the sense of section 6:194 DCC is no longer relevant. Furthermore, for the application of the double reversal of proof, section 6:193j DCC does not, unlike section 6:195 DCC, require that the defendant himself, in whole or in part, has determined or has caused to be determined the content and presentation of the information.3 However, this question of whether the defendant has determined or has caused to be determined the content and presentation of the prospectus may be a relevant factor when considering the element of fault (verwijtbaarheid). I will elaborate upon this element in section 3.6.5.
The consumer is defined as any natural person who is acting for purposes which are outside his trade, business, craft or profession. Furthermore, a transactional decision is defined as any decision taken by a consumer concerning whether, how and on what terras to purchase, make payment in whole or in part for, retain or dispose of a product or to exercise a contractual right in relation to the product, whether the consumer decides to act or to refrain from acting. A trader is defined as any natural or legal person who is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader.
Two questions are important if we consider the consequences of the unfair commercial practice rules of the DCC with respect to prospectus liability. The first question is whose (monetary) interests enjoy the protection of these rules. In principle, these rules protect the (interests of) the consumer, in financial market terras the private investor. This is not restricted to the average private investor, but also encompasses the more experienced, qualified investor as long as he is not acting for purposes relating to his trade, business, craft or profession.
The second question is which parties in an IPO can be held liable onder these unfair commercial practices rules. The application of this set of rules depends upon whether the party qualifies as trader. Principally, this will be issuer X N.V. who is obliged to publish or to make public a prospectus.4 The prospectus is an invitation to make an offer (an invitation to the investors to subscribe for the securities to be issued or listed) with respect to the securities to be issued/listed. It can be argued that the publication and distribution of a prospectus is a commercial communication including advertising that is directly connected with the promotion, sale or supply of a product5 to consumers.
For the same reasons, lead manager Y N.V. qualifies as a trader who performs a commercial practice. The other sponsoring banks will also qualify as traders who commit a commercial activity if they distribute the prospectus through their network of regional offices.6 In practice, it is most likely that the lead manager, sometimes together with the other sponsoring banks, distributes the prospectus on the order of the issuing company.7 Hereby, these persons will qualify as trader since trader is defined as "anyone acting in the name of or on behalf of a trader".8
If shareholders get a listing on the stock exchange and subsequently sell their securities simultaneously with the issue of securities, these shareholders are likely to qualify as a trader. These shareholders offer their securities to the public on the basis of the issuer 's allegedly misleading prospectus.9
In principle, neither the board of directors collectively nor the individual directors of X N.V., in their capacity as such, qualify as a trader. The general tule is that their acts are attributed to the company. However, under certain circumstances, directors of X N.V. can be held personally liable for a misleading prospectus. The executive and non-executive directors who know that the prospectus contains misleading information and do nothing to prevent its publication and/or distribution, can be held liable on the basis of the general tort provision of section 6:162 DCC.10 Notice that the claimant does not enjoy the advantages of the legi speciali.
The accountant who, on the order of the lead manager, conducts a due diligence investigation and allows the insertion of his 'letter of comfort' in the prospectus, cannot be regarded as a trader who commits a commercial practice.11 Even though he is a natural or legal person who is acting for purposes relating to his trade, business, craft or profession, it cannot be argued that his activities are directly connected with the promotion, sale or supply of the securities on offer.12
Finally, the purchase of securities qualifies as a transactional decision. It is important to note that not only the purchase itself, but also the terras and conditions on the basis of which the securities are acquired qualify as a transactional decision in the sense of the unfair commercial practices rules.