Manipulation of shares. The imposition of fine is compatible with the ECHR


Georgouleas and Nestoras v. Greece 28.5.2020 (no. 44612/13 and 45831/13)

see here 


Maintaining the proper functioning of the capital market. The plaintiffs as stockbrokers with methodical transactions on the share of the company DΚ, which were all carried out through specific stock exchanges, formed in a methodical way, the price and marketability of the share of the said SA. In this way, inaccurate and misleading information was spread about this stock, which could affect the price and transactions of this stock. The domestic courts imposed a fine on them in accordance with the law. They complained of a violation of Article 7 of the Convention on the grounds that no penalty was imposed at the time they committed the act.

The Court noted that national legislation did not provide a detailed account of all the ways in which false or misleading information could be disseminated or published, but it was clear that the legislature wanted to protect the market from stock price methods.

The ECHR subsequently held that the applicants’ behavior did not constitute a case of misconduct, as it proved that not only had there been no consistent jurisprudence in their favor, but there had been a significant number of decisions to the contrary. It unanimously held that Article 7 of the Convention had not been violated.


Article 7


The applicants, Ilias Georgouleas and Spyridon Nestoras, are Greek nationals who were born in 1965
and 1974 respectively and live in Athens and Piraeus (Greece).

The case concerned their complaint about having been found guilty of financial market

In October 2007 the Hellenic Capital Market Commission stock market regulator found the
applicants guilty of violating the first sentence of Article 72 § 2 of Law no. 1969/1991, which
penalised the publication or dissemination of inaccurate or misleading information affecting the
price of or dealing in listed securities. It had found that the applicants had been involved in
transactions to artificially manipulate the price of shares in the D.K. company in 2003 and 2004.
The applicants appealed successfully to the Athens Administrative Court of Appeal, which held that
the transactions did not fall within the scope of the first sentence of Article 72 § 2 as they could not
be regarded as the publication or diffusion of inexact or misleading information, even if they had
aimed at manipulating the price of shares and had resulted in artificially influencing them.
In April 2009 the Capital Market Commission lodged appeals on points of law, which were upheld in
January 2013 by the Supreme Administrative Court.

In particular, the Supreme Administrative Court held that Article 72, which aimed at the market’s
smooth running and the protection of investors, did not specify particular forms of disseminating
inexact or misleading information that could lead to artificially influencing share prices.

If the transactions had therefore been entered into with the intention of providing false information
concerning the price and marketability of securities so as not to reflect their true value, and had
resulted in misleading investors as regards elements that could influence their decision-making, then
the performance of those transactions would be in breach of the provision.

The transactions had constituted dissemination of inexact or misleading information, given that the
artificially formulated data concerning the price and marketability of the shares had been published,
by law, in the daily stock exchange official list and in the electronic record of transactions. That
conclusion was reinforced by the second sentence of Article 72 § 2, which provided that professional
facilitators, that is to say those who on a daily basis entered into many transactions on behalf of
others, would not be sanctioned unless they knew or ought to have known that by entering into
those transactions, they had been attempting to disseminate inexact or misleading information.

The applicants’ case was remitted to the appeal court, which upheld the fines, although it reduced
that of the second applicant.

Relying on Article 7 (no punishment without law), the applicants complained that the sanctions
imposed on them by the Commission, as upheld by the administrative courts, had violated their right
not to be held guilty for an act which had not constituted a criminal offence prescribed by law


The Court notes that the applicants were sanctioned for having breached the first sentence of Article 72 § 2 of Law no. 1969/1991, which provided that sanctions would be imposed on anyone who published or disseminated “in any way” inaccurate or misleading information regarding securities to be listed or already listed on an official stock exchange that, by its nature, could affect the price of, or dealings in, those securities. The Commission and the administrative courts considered that, by entering into a large volume of transactions, the applicants had breached that Article, as those transactions had resulted in giving inaccurate information as regards the prices and the marketability of the securities and, therefore, constituted dissemination of false or inaccurate information. The Court therefore has to examine whether the conclusions reached by the domestic courts concerning the transactions entered into by the applicants, defined as falling within the ambit of “disseminating in any way false or inaccurate information”, were based on an analysis which could be considered as arguably reasonable and, consequently, whether it was foreseeable that the applicants acts could constitute dissemination of false or inaccurate information.

In this regard, the Court notes that the domestic legislation did not provide a detailed reference of all the ways in which the dissemination or publication of false or misleading information could take place. On the contrary, the legislator, wishing evidently to include as many ways of committing the offence as possible, used the expression “in any way” and the domestic courts interpreted that provision as including transactions. In particular, it is clear to the Court that the legislator wished to secure the market from the dissemination or publication of false or inaccurate information that could affect the price or marketability of securities. In this connection, the conclusions of the domestic court that any intervention in respect of securities that affected their real value or marketability and resulted in artificial supply and demand, produced information that was capable of distorting the market and affecting the price and marketability and thus fell within the ambit of Article 72 § 2 of Law no. 1969/1991, do not appear unreasonable. Nor can it be said that the interpretation given by the Commission and confirmed by the administrative courts was so extensive and unforeseeable that it was incompatible with the very essence of the offence. The above considerations are further reinforced by the second sentence of the Article in question, which refers explicitly to the conduct of transactions as a way of manipulating the market.

The Court has now to determine whether the applicants could have foreseen at the material time, if need be with legal assistance, that their actions fell within the ambit of the impugned provision. In this regard, the Court notes that the Government provided several judgments, albeit from first-instance administrative courts and not from the Supreme Administrative Court, which had interpreted the said Article as they did in the case of the applicants as long ago as 2002 and 2003, that is to say before the applicants had proceeded with the transactions for which they were sanctioned by the Commission. Although there was a subsequent change in how that provision was interpreted by the domestic courts, the applicants cannot say that they were influenced by that change in the case-law, which took place after they had committed the offence. In this regard, the case differs from Dragotoniu and Militaru-Pidhorni , in which the Court held that there had been a violation of Article 7 of the Convention due to the fact that the applicants could not have foreseen the change in the domestic case-law, which had rendered their actions punishable offences, whereas that had not been the case until then . It is here reiterated that Article 7 of the Convention is not incompatible with judicial law-making and does not outlaw the gradual clarification of the rules of criminal liability through judicial interpretation from case to case, provided that the resultant development is consistent with the essence of the offence and could reasonably be foreseen . The above-mentioned considerations are equally applicable to a country whose legal system is based on statute and not on court precedents, such as Greece. As long as a criminal statutory provision may be objectively construed as referring to the indicated conduct, foreseeability of judicial interpretation may not be excluded 

 The Court takes note of the applicants argument that academics and scholars have interpreted the impugned provision as not including behaviour such as theirs and that they have considered it as “unclear”. However, the Court has already held that, even though it can have regard to the doctrinal interpretation of the law at the material time, particularly where it tallies with the judicial interpretation the fact that writers have freely interpreted a statute cannot replace the existence of a body of case-law.

The Court additionally notes that the scope of the concept of foreseeability depends to a considerable degree on the content of the instrument in issue, the field it is designed to cover and the number and status of those to whom it is addressed. Persons carrying on a professional activity must proceed with a high degree of caution when pursuing their occupation and can be expected to take special care in assessing the risks that such activity entails. It follows that the applicants, acting in their professional capacity, were expected to take such special care when entering into transactions in assessing the risks of their activity.

The Court does not subscribe to the applicants argument that the fact that the Article by which the impugned provision was substituted meant that their behaviour had not been punishable until then. In particular, it is clear that Article 7 of Law no. 3340/2005, which replaced the impugned provision in 2005, was a transposition of Directive 2003/6/EC . If one looks at the original text of the Directive, it is easily inferred that the Greek legislator merely transposed into national law the provisions of the Directive and that the wording of the two texts is almost identical in its relevant parts . Therefore, it cannot be said that the legislator for the first time meant to include that behaviour as a way of manipulating the market, because in any event, the more detailed wording was a result of the wording used in the European legislation that was subsequently transposed into the national law.

The foregoing considerations are sufficient to enable the Court to conclude that the relevant provision of the Greek law was formulated with sufficient precision to enable the applicants to discern, if need be with appropriate advice, to a degree that was reasonable in the circumstances, that their actions risked entailing sanctions being imposed on them.

Therefore, there has been no violation of Article 7 of the Convention

The first applicant, in his remarks submitted on 04.12.2018, filed a complaint in accordance with Article 4 of Protocol No. 7 of the Convention. However, the Court noted that this complaint was first made by the applicant in his remarks, and should therefore be rejected because it had been submitted outside the six-month period.


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