AMF Market Manipulation Sanctions Upheld on Final Appeal

France's highest civil court, the Cour de cassation, has rejected the final challenge by a German trading firm and its chief executive against sanctions totalling €2.4m imposed by the AMF's enforcement commission. The ruling closes a legal battle that started with the original decision in May 2021 and confirms that the AMF can reach across borders to sanction activity conducted on a German derivatives exchange when that activity distorts instruments tightly correlated to French sovereign debt.

What the AMF Found: Spoofing Across 303 Trading Sequences

How the manipulation worked

Between July and October 2015, the German firm placed orders on Eurex, the German regulated derivatives market, in futures contracts whose underlying asset included French Treasury bonds known as OATs (obligations assimilables du Trésor), traded in the FOAT contract. The AMF's enforcement commission identified 303 distinct sequences in which the firm submitted large passive orders at the top three price levels of the order book, creating a misleading impression of genuine supply or demand, then cancelled those orders in bulk before execution.

This pattern, commonly called spoofing or layering, is treated as market manipulation under EU market abuse rules. The commission found that the firm's passive orders, which it characterised as decoy orders, distorted the apparent offer and demand in the FOAT for every sequence under review.

Dominant position and unfair trading conditions

For 207 of the 303 sequences, the commission went further, finding that the firm had secured a dominant position in the order book, producing trading conditions that were structurally unfair to other market participants. The estimated profit attributable to the conduct across 180 sequences was put at close to €340,000. Each respondent, the firm and its director, received an individual sanction of €1.2m.

Jurisdiction: Why the AMF Could Act on Eurex Orders

The correlation argument

The firm's first line of defence was that the AMF lacked authority over trades executed on Eurex, a German-supervised venue. The commission rejected this by characterising the FOAT contracts as financial instruments linked to the underlying French sovereign bond, which is traded on platforms under AMF supervision. Because of the high correlation coefficient between the FOAT futures and the OAT cash bond, the commission concluded that manipulating the futures market could, and did, affect a market within its remit. That reasoning was accepted by the Paris Court of Appeal and has now been confirmed by the Cour de cassation.

The principle has real weight for firms operating in cross-listed or highly correlated derivatives markets across EU borders. A venue-by-venue analysis of jurisdiction is not sufficient: regulators can and do look at the economic relationship between instruments.

The Appeals Timeline

Stay of execution and the Paris Court of Appeal

After the May 2021 decision, the firm and its director sought a stay of execution. A Paris Court of Appeal judge granted a partial stay for the individual director pending the full appeal but denied the stay for the firm itself. The full appeal was heard by the Paris Court of Appeal, which issued its judgment in June 2023. The court admitted the appeal and the AMF president's cross-appeal as procedurally valid, then rejected both on the merits: the original sanctions stood, and the AMF's attempt to increase the penalty also failed. The court also dismissed all counterclaims and compensation requests brought by the firm and its director.

Cour de cassation: March 2025

The firm and director then filed a pourvoi en cassation, numbered 23-20.432. In its ruling of March 2025, the Cour de cassation dismissed the challenge in full. No further domestic appeal avenue remains. The €1.2m sanction against each respondent is now final and enforceable.

Compliance Implications for Firms Using Derivatives Linked to EU Sovereign Debt

Cross-border reach of national regulators

This case is a practical illustration of how EU market abuse rules interact with national supervisory jurisdiction. Executing orders on a non-domestic regulated market does not insulate a firm from enforcement by the regulator of the underlying instrument's primary market. Compliance teams and their advisers, whether using traditional audit trails or digital asset accounting software to track positions and order flows, need to map regulatory exposure by reference to the underlying instrument, not just the execution venue.

For firms active in sovereign bond derivatives across Eurex, Euronext, or any other cross-listed EU venue, the case reinforces the need for real-time order surveillance capable of flagging passive-order-to-cancellation ratios and order book concentration. The AMF identified 303 sequences over roughly three months: that volume of potentially suspicious activity should have been visible to an alert compliance function long before it reached the regulator's attention.

Record-keeping and audit trail requirements

The commission's findings relied heavily on granular order-book data. Firms across the EU are required under MiFID II to retain detailed records of orders, modifications, and cancellations. Where those records exist, regulators will use them. Robust crypto bookkeeping software and, more broadly, trade-surveillance record-keeping across all asset classes must be treated as a compliance necessity rather than an operational nicety. The same data that helps a firm defend itself is the data the regulator will subpoena if it does not.

The AMF case also touches on how enforcement decisions travel: the commission's reasoning in 2021 shaped the Paris Court of Appeal's analysis in 2023, which in turn constrained the Cour de cassation's review. Getting the first-instance record right, including documented supervisory sign-offs and contemporaneous rationale for order strategies, remains the single most important defensive step.

Firms operating in the EU should also read this case alongside the AMF's separate sanctions against seven traders for manipulation on Euronext Access, which shows that the commission is active across multiple market segments simultaneously. For German-domiciled entities in particular, the German government's AML action plan adds a further compliance layer on top of AMF-style cross-border enforcement risk.

Key Takeaways for Compliance Teams

Three immediate review points

First, map all derivatives positions back to their underlying instruments and identify which national regulators could assert jurisdiction over those underlyings, regardless of where the derivative trades. Second, test whether your order surveillance system would have detected a pattern of large passive orders followed by mass cancellations across hundreds of intraday sequences. Third, confirm that your record-retention policy captures the full lifecycle of each order, including modifications and cancellations, at the granularity regulators expect under MiFID II. For firms integrating digital asset accounting software into a broader financial reporting stack, ensuring that order-level data feeds are complete and time-stamped to the required standard applies equally to crypto-native and traditional derivatives desks.

Source: Autorité des marchés financiers (AMF)