4.5.4 Lead manager and other members of the syndicate of sponsoring banks

The lead manager (chef de file), Y S.A., and the other members of the banking syndicate (syndicat bancaire) owe a legal duty towards the issuing company as well as to the investing public. Their obligations are to counsel and assist the company requesting admission to listing on the regulated market.1 They cannot simply execute the orders of the issuer. They have to balance the interests of the issuing company and the investors.2 Furthermore, they have to provide active assistance to the company in its preparation of the prospectus such that the latter contains accurate and precise information.

The sponsoring banks in their capacity as investment service providers (prestataire de services d 'investissement), need to perform a due diligence inquiry of the prospectus so as to ensure that the information in the prospectus gives a sincere and fair view of the issuer.3 On the basis of that inquiry, the lead manager4 of the syndicate of sponsoring banks is required to certify5(attestation) to the AMF that they exercised customary professional diligence6 and found no inaccuracies or material omissions likely to mislead investors or affect their investment decision.7 The sponsoring banks will be provided with the completion letter of the company's auditors before the latter deliver a copy of the letter to the AMF to enable them to examine the company auditors' observations. By no means, the sponsoring banks are required to validate the interaal auditors' due diligence inquiry.8

According to the professional code, only the lead manager, in this example Y S.A., will incur responsibility for the certification.9 Until this moment, there has been no (reported) case brought before a court, therefore it is not certain whether French courts will follow this approach; it may hold the other sponsoring banks also liable towards investors for mistakes in their respective participation in the due diligence inquiry.

With respect to investors' claims on the basis of tort, it is noteworthy that contract clauses exonerating the sponsoring banks for liability towards third parties are null and void, if the sponsoring bank acted in gross negligence (faute lourde) or intentional.10 Even though French case law is not very precise on what exactly constitutes gross negligence, some scholars assume that it is very likely that the court will qualify a (simple) breach of the professional standards regarding the due diligence procedure as gross negligence on the part of the professional.11

To my knowledge there is no French case law concerning a private law liability claim against a lead manager and/or other sponsoring banks. Such a claim should be based on the general tort law provision in section 1382 FCC. This claim would be subject to the same difficulties as described with the respect to the issuer's liability above.