4.6 Tortious behaviour

The defendant's behaviour can be tortious if his act or omission breaches a duty imposed by law (violation de la loi)1 or a rule of conduct prescribed to a prudent family father, professional and non-professional alike (violation de la coutume et des usages d'un bon père de famille prudent et habileté).

A violation of the law is interpreted as any violation of the law in its most encompassing sense; it includes administrative law, criminal law and private law norms.2 Therefore, a claimant can base his claim on a violation of the General Regulation of the AMF. If the information provided in the prospectus is not accurate and/or precise and presented fairly, the defendant violated section 223-1 of the General Regulation of the AMF.

The duty imposed by law has to protect against damages such as those suffered by the claimant. Sections L. 411-1 and L. 412-1 of French Monetary and Financial Code prescribes that natural persons and legal persons making an offer of securities to the public or seeking listing of their securities on a regulated market must, prior to doing so, publish and make available to any interested party a document that gives information about the content, terras and conditions of the offer and the situation of the issuer in such a way that it enables an investor to decide to buy or subscribe for these financial instruments. The duty to publish a prospectus that contains accurate and precise information which is presented fairly is imposed on the issuer to protect the investor from subscribing for financial instruments on the basis of misinformation.

The publication of false and misleading advertising (publicité trompeuse et mensongère) by traders (commerQants) violates a rule of conduct as well.3 Therefore, the issuer, lead manager and the other sponsoring banks may violate a rule of conduct when they publish and/or distribute false or misleading information in, amongst other forms of corporate information, the prospectus. If the claimant bases his claim on a violation of a rule of conduct, he has to prove the exact requirements laid down in this rule of conduct.4 The claimant has to demonstrate how the defendant's actual behaviour deviated from the abstract behaviour required by the rule of conduct.

Despite this hurdle, a tort claim based on a violation of a rule of conduct could serve the investor better than a claim based on the violation of the information duties laid down in the French Monetary and Financial Code and/or the General Regulation of the AMF. The publication and/or distribution of inaccurate or imprecise information in a prospectus do not in itself make it plausible that there is a causal relationship between this information and the losses incurred. However, if the information in the prospectus is false or misleading, it is more likely that the losses incurred by the investor are caused by the publication and/or distribution of the prospectus. The information in a prospectus is misleading if the information was of a nature to induce the persons to which it was addressed to make a wrong decision (les informations diffusées étaient de nature à induire en erreur ceux qui les recevaient).5The misleading nature of information is not restricted to the actual information provided but it includes the information (fraudulently) withheld (réticence dolosive)6 from the investors as well.7 The information omitted also affects their decision to make an informed decision with respect to the securities on offer.