Bad investment: what is the responsibility of your advisor?

Scandalous investment cases where thousands of “small” savers are caught in the net are flourishing. Like the great Aristophil scam, where 18,000 investors believed in the rapid capital gain from the sale of ancient manuscripts and books. But also the collapse of the hotel companies of the Maranatha group, at the hands of 6,000 savers, a file under full investigation on which suspicions of chivalry weigh.

So when a savings product goes bad, what is your adviser’s responsibility? How to engage? What is there to know.

What responsibility should be involved?

The providers of investment services are subject to the obligations, especially in matters of information and advice, which are included in the Monetary and Financial Code (article L.533-12), in the Civil Code and in the jurisprudence . These rules concern bank network advisors, brokers, independent wealth management advisors, such as CIFs (financial investment advisors), etc.

How do you act?

If you believe that your adviser has not fulfilled his obligations and that your prejudice is definitive, before launching your head into legal action, you should try to reach an amicable agreement with him.

First, you contacted them to ask for explanations and to express your grievances. If you do not agree with their answer, you will send them a written, clear and precise complaint, with a copy of all supporting documents. In the absence of a satisfactory answer and if your adviser is regulated by the AMF, you can contact their mediation service. This procedure is free but extrajudicial. This means that you cannot at the same time take legal action. ” The 21st century justice modernization lawe centurysays Claire Castanet, Director of Investor Relations at the AMF, now makes it mandatory to try mediation or conciliation before returning to court, for disputes less than 4,000 euros under penalty of inadmissibility by the judge. »

You can write in parallel to the professional council chamber. Once these remedies have been exhausted, you can decide to take legal action by calling a lawyer and/or going through a consumer defense association, such as UFC-Que Choisir, or via associations that are created specifically for great enterprises (case of Aristophil. and Maranatha). They can act in the field of group action.

The lawyer will decide to assign or not, after having also engaged in discussions to find a common ground. Consider, if necessary, your legal protection insurance for partial coverage of attorneys’ fees.

On what legal basis?

The obligations of the intermediary provide solid support for an action in violation of the duty to inform and advise. It is up to the professional to demonstrate that he has complied with his obligations and not to the client to demonstrate that he has not. ” Mawarns M.e Hélène Feron-Poloni de Lecoq-Vallon & Feron-Poloni, there should be no illusions. There is a great distance between these principles, a sum of desire, and practice. »

For example, the implementation of professional liability insurance (RCP) often stumbles on a deductible of 15,000 euros and sometimes 45,000 euros. It can also provide exclusions: the marketing of the product can be covered, but not its design. ” The RCP contract is not a guarantee fund. The insurer will analyze each case on a case by case basis., confirms Benoist Lombard, president of the National Chamber of Wealth Management Councils (CNCGP). And, advises M.e Hélène Feron-Poloni, the insurance company will fight tooth and nail not to pay “.

Failure to comply with the council’s legal obligations is not in itself sufficient to obtain a conviction in the courts. ” Imust be established that the violation of a specific obligation is directly related to the damage suffered or contributed to its occurrence “, says the lawyer.

Acting criminally requires proving that the financial intermediary intended to defraud. For Aristophil, brokers were involved in this field, but, explains Me Hélène Feron-Poloni, whose firm is defending 1,800 people injured in this case, “ we decided to sue Société Générale and CIC for liability on the grounds that they had ensured the legality of the operation “. Moreover, she argues, criminal proceedings against the CGPs will put them in jeopardy insurance that does not cover intentional misconduct “.

In the Maranatha case, where the company defends the interests of a dozen savers who have invested large amounts, the responsibility of the advisors is analyzed. Did the CGP properly inform his client about the specific risk of the product and advise him on diversification?

Does your advisor have to compensate you?

When the liability of a professional is recognized in court, the judges determine the compensation for the rescuer. ” The damage for which compensation is sought for the investor is always 100% of the lossexplains M.e Hélène Feron-Poloni, but the courts apply the principle of the loss of chance which results in partial compensation, although it may be close or very close to the total damage.. For the management mandate, failure to comply with the mandate results in 100% compensation of the loss (Court of Cassation of December 6, 2017).

If your dispute was resolved through AMF mediation, the amount of the compensation varies depending on the assessment of the circumstances. Among the 199 favorable financial recommendations made by this service in 2016, ” gestures range from 8 euros to 250,000 euros, with an average of 7,772 euros and a median of 1,000 euros “.

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