Consob's Liability: Ruling No. 9067 of 2018 and the Duty of Supervision
Ruling No. 9067 of the Court of Cassation, issued on April 12, 2018, represents a significant turning point in jurisprudence concerning Consob's (the National Commission for Companies and the Stock Exchange) liability for supervisory omissions. This case, involving numerous investors who suffered damages due to the misconduct of a stockbroker, highlights the need for proactive intervention by the supervisory body to ensure investor protection.
Context of the Ruling
In the case at hand, 113 investors had sued Consob and the Italian Republic, alleging damages resulting from the illicit conduct of a stockbroker. The first-instance judges had recognized partial liability for Consob, attributing to it a delay in its inspection activities. However, the Court of Appeal of Rome modified the decision, denying Consob's liability for most of the violations.
The Court of Appeal held that Consob's inspection activities were delayed, despite reports of irregularities.
Principles Established by the Court of Cassation
With ruling No. 9067, the Court of Cassation affirmed that Consob has a supervisory obligation towards financial intermediaries, a duty derived from the principles of legality and impartiality. The Court emphasized that the body's discretion cannot justify the failure to implement control measures when clear warning signs emerge.
- Consob possesses inspection and control powers that must be exercised promptly.
- Consob's liability cannot be excluded simply because the harmful conduct was perpetrated by third parties.
- It is necessary to demonstrate the causal link between Consob's omission and the damages suffered by investors.
Conclusions
Ruling No. 9067 of 2018 marks a significant step in strengthening investor protection and holding Consob accountable. Future decisions must follow this orientation, ensuring that supervision is not merely a power but an unavoidable duty for the supervisory body. The necessity for timely intervention in the presence of warning signs of irregularities is now clearly established by jurisprudence, for the benefit of all investors.
