The Grand Chamber of the Court of Justice of the European Union Acknowledges the Right to Remain Silent During Administrative Proceedings for Market Abuse
CJEU, Grand Chamber, Judgement 2 February 2021, C-489/19, D.B. v. CONSOB
The Grand Chamber of the Court of Justice of the European Union, ruling on case C-489/19 with judgement 2 February 2021, ascertained that natural persons who are subject to a (formally) administrative investigation have the right to remain silent when their answers might establish their liability for an offence that is punishable by administrative sanctions of a criminal nature, or their criminal liability.
According to the Court, the existence of the right to remain silent must be directly inferred from the principles of defense and fair trial as in Articles 47 and 48 of the Charter of Fundamental Rights of the Union, as well as in Article 6 ECHR, as interpreted by the jurisprudence of the ECHR. Therefore, the individual has the right to refrain from making self-accusatory statements, although it’s specified that the right to silence cannot justify every failure to cooperate on the part of the person concerned with the competent authorities, such as refusing to appear at a hearing planned by those authorities or using delaying tactics designed to postpone it.
Consequently, the CJEU rules that the EU legislation on market abuse (directive 2003/6 / EC, so-called MAD I, and EU regulation 596/2014, so-called MAR) must be interpreted as allowing Member States not to penalize natural persons who, in an investigation carried out for market abuse, refuses to provide the competent authority with answers that could establish their liability for an offence that is punishable by administrative sanctions of a criminal nature, or their criminal liability.
The CJEU was requested for a preliminary ruling by the Italian Constitutional Court, called upon to assess the constitutional legitimacy of the Italian legislation (art. 187-quinquiesdecies d.lgs. 58/1998), which penalizes the failure to cooperate with the Consob and the Bank of Italy during a Consob proceeding for market abuse. The case in question concerned a person to whom the Consob imposed some administrative (but criminal in substance) penalties for insider trading, and an additional financial penalty on the ground that he had declined to answer the questions put to him at the hearing.
For a comment on the judgement (in Italian language), please refer to E. Basile, The Court of Justice Recognizes the Right to Silence in the Context of "Punitive" Administrative Proceedings, in Sistema Penale, February 3, 2021.
To read the judgement, click here.
To read the official press release, click here.