European Court of Human Rights

 

 

FIRST SECTION

CASE OF GEORGOULEAS AND NESTORAS v. GREECE

(Applications nos. 44612/13 and 45831/13)

 

JUDGMENT

 

STRASBOURG

28 May 2020

 

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Georgouleas and Nestoras v. Greece,

The European Court of Human Rights (First Section), sitting as a Chamber composed of:

          Ksenija Turković, President,
          Linos-Alexandre Sicilianos,
          Aleš Pejchal,
          Armen Harutyunyan,
          Pere Pastor Vilanova,
          Tim Eicke,
          Raffaele Sabato, judges,
and Abel Campos, Section Registrar,

Having regard to:

the applications (nos. 44612/13 and 45831/13) against the Hellenic Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Greek nationals, Mr Ilias Georgouleas and Mr Spyridon Nestoras (“the applicants”), on 6 July 2013 and 12 July 2013 respectively;

the decision to give notice to the Greek Government (“the Government”) of the complaint under Article 7 of the Convention;

the parties’ observations;

Having deliberated in private on 28 April 2020,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1.  The applications concern the imposition on the applicants of fines in 2007 by the Hellenic Capital Market Commission for disseminating false or inaccurate information concerning the value of securities, which could affect their price through entering into certain transactions. They complained that the sanctions imposed on them fell under criminal law but were not foreseeable, as required by Article 7 of the Convention.

THE FACTS

2.  The first applicant was born in 1965 and lives in Athens. The second applicant was born in 1974 and lives in Piraeus. They were represented by Mr I. Ktistakis, a lawyer practising in Athens.

3.  The Government were represented by their Agent’s delegate, Mrs G. Papadaki, Advisor at the State Legal Council.

4.  The facts of the case, as submitted by the parties, may be summarised as follows.

5.  The Hellenic Capital Market Commission (“the Commission”) is an independent administrative body empowered to supervise compliance with stock exchange legislation. It decided to investigate trading in the shares of the D.K. company, listed on the Athens stock market, which had been conducted during the periods from 1 January to 17 July 2003, 18 July to 26 September 2003, 29 September 2003 to 19 March 2004, and 7 September to 22 October 2004.

6.  The Commission concluded that there was evidence that individuals linked to a limited liability company, “G.” (“the company”), had entered into transactions organized for the purpose (“κατάρτιση μεθοδευμένων συναλλαγών”) of artificially determining the value and marketability of the shares of the company D.K., with the consequence of disseminating inaccurate and misleading information within the public of investors. Based on the volume of the transactions, on the time when they had occurred and on the identity of the persons who had entered into them, the Commission concluded that the transactions had had an artificial effect on the price and marketability of the company’s securities during the periods in which their price had risen, that is to say from 1 January to 17 July 2003 and from 10 October 2003 to 28 April 2004.

7.  The Commission also concluded that the first applicant, the majority shareholder, president and chief executive officer of the company, acting as a coordinator in collaboration with the second applicant, an employee in that company, had participated in the manipulation of the price and marketability of D.K.’s shares. They had entered into transactions on their own behalf, but also on behalf of clients of the company. More specifically, they had:

a) pre-arranged trading: (i) by conducting, on their own behalf and on behalf of clients of the company, purchases and sales through the same or several stockbroker companies, mostly having as counterparties people participating in the scheme; (ii) by placing matched orders; (iii) by confirming and/or recommending to the counterparty stockbroker companies the artificial fixing and trading of D.K.’s shares, as proven by a sample check of telephone archives;

b) done substantial trading at the closure of the market, part of which had been conducted between the implicated persons, in order to artificially determine the price and marketability of D.K.’s shares.

8.  On 19 August 2005 the Commission sent letters to the applicants informing them about the evidence collected by the investigation. They were requested to express their views and provide any relevant documents. On 27 September 2005 the applicants sent their replies.

9.  On 2 October 2007 the Board of the Commission found both applicants guilty of violating the first sentence of Article 72 § 2 of Law no. 1969/1991. It issued decision no. 7/447/2.10.2007 against the first applicant, fining him 100,000 euros (EUR), and decision no. 8/447/2.10/2007 against the second applicant, fining him EUR 60,000.

10.  The applicants lodged appeals with the Athens Administrative Court of Appeal against the Commission’s decisions. On 31 October 2008 their appeals were granted by decisions nos. 3289/2008 and 3290/2008. The appellate court considered that the first sentence of Article 72 § 2 of Law no. 1969/1991 could not be infringed by entering into transactions, unlike the second sentence of the same Article, even though the latter referred only to professional facilitators. Therefore, the transactions which the applicants were accused of having carried out did not fall within the scope of the first sentence of Article 72 § 2 of Law no. 1969/1991, as they could not be regarded as 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 it.

11.  On 8 April 2009 the Commission lodged appeals on points of law against the decisions granting the applicants’ appeals, arguing that the Athens Court of Appeal had erroneously interpreted the impugned legislative provision. The fourth Section of the Supreme Administrative Court, composed of a panel of five judges, issued decisions nos. 1679/2012 and 1681/2012, referring the case to a seven-member panel, due to its importance and to the existence of conflicting case-law (see paragraphs 20 ‑21 below).

12.  On 15 January 2013 the Supreme Administrative Court issued judgments nos. 109/2013 and 111/2013, granting the appeals on points of law lodged by the Commission and quashing judgments nos. 3289/2008 and 3290/2008 of the Athens Administrative Court of Appeal. In particular, the Supreme Administrative Court held that Article 72, the purpose of which was to secure the smooth running of the market and the protection of investors, did not specify particular forms of disseminating inexact or misleading information that could lead to artificially influencing the price of shares. If those 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 entered into 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 virtue of the relevant legislation, in the daily stock exchange official list and in the electronic record of transactions. In addition, the above-mentioned 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 enter 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 conclusions mentioned above were not affected by the fact that in a subsequent law, no. 3340/2005, the ways in which manipulation of the market could be achieved were specified. Those included both entering into transactions and disseminating inexact or misleading information as two distinct ways of manipulating the market. In fact, Law no. 3340/2005 had merely specified the terms and conditions of an infringement of the said provision, in compliance with Directive 2003/6/EC.

13.  The Supreme Administrative Court additionally held that the above-mentioned interpretation of Article 72 § 2 merely clarified the scope of application of the provision. Those who were involved in the stock market and showed the usual diligence could have foreseen that entering into transactions with the features mentioned above would be considered as having risked misleading investors. They could also have anticipated that sanctions would be imposed on them by virtue of Article 72 § 2. Furthermore, the applicants had not claimed that the Supreme Administrative Court or the administrative courts in general had interpreted the provision differently. Having regard to those considerations, the applicants had erroneously claimed that the above-mentioned interpretation of the impugned provision had violated Article 7 of the Convention, which applied not only to criminal sanctions but also to other sanctions that emulated “penalties” based on certain criteria.

14.  A minority of two judges disagreed. In particular, they argued that the literal meaning of the first sentence of Article 72 § 2 did not include entering into transactions as a way of disseminating inexact or misleading information, irrespective of whether the intention behind the performance of those transactions had been to mislead investors. Otherwise, there would have been no need to distinguish, in Article 7 of Law no. 3340/2005, between the dissemination of information and the performance of transactions, as two different ways of manipulating the market.

15.  Subsequently, the Supreme Administrative Court remitted the cases to the Athens Administrative Court of Appeal. The latter issued new judgments nos. 4704/2013 and 1132/2014, upholding the fine imposed by the Commission on the first applicant and reducing the fine imposed on the second applicant to EUR 20,000.

16.  In the meantime, the first applicant was charged with breaching Article 34 of Law no. 3632/1928. By decision no. 2655/2007 of the Indictment Division of the Athens Court of First Instance Athens Council of Magistrates (“the Indictment Division”) issued on 7 September 2007 he was acquitted of all charges. In particular, the Indictment Division held that it did not follow from the file that the applicant had attempted to influence the value of the securities of D.K. by using fraudulent methods and that during the period in issue the shares’ value had dropped by 46%.

RELEVANT LEGAL FRAMEWORK AND PRACTICE

I. Domestic law and practice

A.     Law no. 1969/1991

17.  Article 72 § 2 of Law no. 1969/1991, as replaced by Article 96 § 1 of Law no. 2533/1997 and applicable at the time, provided as follows:

“A fine of up to five hundred million drachmas (500 000 000) [EUR 1,467,349.99] shall be imposed by the Capital Market Commission on natural or legal persons who publish or disseminate in any way inaccurate or misleading information regarding securities to be listed or already listed on an official stock exchange that by its nature may affect the price of or dealings in those securities. Persons who act professionally as facilitators shall not have administrative sanctions imposed on them on the basis of the previous sentence simply for entering into transactions on those securities, unless the facilitator knew or ought to have known that by entering into the transaction, he was attempting to disseminate false or inexact information or if he was contributing in any additional way to facilitating those transactions. This provision shall also apply to members of the board of directors of companies applying for admission of their shares to a recognised stock exchange, where inaccurate or misleading information is contained in the listing particulars required for the purposes of the above-mentioned admission or is published or disseminated in any way”.

B.     Law no. 3340/2005

18.  By Article 32 of Law no. 3340/2005, Article 72 § 2 of Law no. 1969/1991 was repealed, but it remained in force for acts that had been committed prior to its entry into force. In addition, Article 7 of Law no. 3340/2005, transposing Directive 2003/6/EC of the European Parliament and of the Council on insider dealing and market manipulation (market abuse), provides as follows:

“1. Market manipulation shall be prohibited.

2. ‘Market manipulation’ means:

(a) transactions or orders to trade which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of financial instruments, or which secure, by a person, or persons acting in collaboration, the price of one or several financial instruments at an abnormal or artificial level, unless the person who entered into the transactions or the person on behalf of whom the transactions have been entered into or the person who issued the orders to trade establishes that these transactions were entered into or that he issued the orders for the transactions for legitimate reasons and that these transactions or orders to trade conform to accepted market practices on the regulated market concerned;

(b) transactions or orders to trade which are combined with/constitute fictitious devices or any other contrivance;

(c) dissemination of information through the media, including the Internet, or by any other means, which gives, or is likely to give, false or misleading signals as to financial instruments, including the dissemination of rumours and false or misleading news, where the person who carried out the dissemination knew, or ought to have known, that the rumours or information was false or misleading ...”

C.     Law no. 3632/1928

19.  Article 34 subparagraph a) of Law no. 3632/1928 provided at the material time:

“Whosoever acts in the following way shall be punished by imprisonment and pecuniary sanction ... or by either of those penalties:

a) whosoever, in order to receive unlawful gain, knowingly uses fraudulent means misleading others so as to affect the prices in the stock market;

...”

D.     Domestic case-law

20.  According to certain judgments issued in 2002 and 2003 by administrative courts of first instance, the adoption of the first sentence of Article 72 § 2 proved that the legislator wanted to secure the market’s credibility in order to effectively protect investors. If someone entered into transactions in order to affect the price of securities, his or her action could be considered as disseminating false or inaccurate information that could affect the price and marketability of those securities, as the prearranged transactions would be published and other investors would take that information as a basis for choosing to buy or sell securities. Therefore, conducting a large volume of pre-arranged trading was in breach of the first sentence of Article 72 § 2 (judgments nos. 10698/2002, 9294/2002, 14735/2003 of the Athens Administrative Court of First Instance, and judgments nos. 1413/2003 and 244/2003 of the Piraeus Administrative Court of First Instance).

21.  On 30 June 2006 the Supreme Administrative Court issued judgment no. 1898/2006, by which it held that the first sentence of Article 72 § 2 could not be breached by conducting transactions, as that case was only provided for by law in the second sentence concerning professional facilitators.

II. European UNION law

22.  The relevant parts of Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) read as follows:

“2. ‘Market manipulation’ shall mean:

(a) transactions or orders to trade:

- which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of financial instruments, or

- which secure, by a person, or persons acting in collaboration, the price of one or several financial instruments at an abnormal or artificial level,

unless the person who entered into the transactions or issued the orders to trade establishes that his reasons for so doing are legitimate and that these transactions or orders to trade conform to accepted market practices on the regulated market concerned;

(b) transactions or orders to trade which employ fictitious devices or any other form of deception or contrivance;

(c) dissemination of information through the media, including the Internet, or by any other means, which gives, or is likely to give, false or misleading signals as to financial instruments, including the dissemination of rumours and false or misleading news, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading. In respect of journalists when they act in their professional capacity such dissemination of information is to be assessed, without prejudice to Article 11, taking into account the rules governing their profession, unless those persons derive, directly or indirectly, an advantage or profits from the dissemination of the information in question.

In particular, the following instances are derived from the core definition given in points (a), (b) and (c) above:

- conduct by a person, or persons acting in collaboration, to secure a dominant position over the supply of or demand for a financial instrument which has the effect of fixing, directly or indirectly, purchase or sale prices or creating other unfair trading conditions,

- the buying or selling of financial instruments at the close of the market with the effect of misleading investors acting on the basis of closing prices,

- taking advantage of occasional or regular access to the traditional or electronic media by voicing an opinion about a financial instrument (or indirectly about its issuer) while having previously taken positions on that financial instrument and profiting subsequently from the impact of the opinions voiced on the price of that instrument, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way.

The definitions of market manipulation shall be adapted so as to ensure that new patterns of activity that in practice constitute market manipulation can be included.”

THE LAW

I. JOINDER OF THE APPLICATIONS

23.  Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.

II. ALLEGED VIOLATION OF ARTICLE 7 OF THE CONVENTION

24.  The applicants complained, under Article 7 of the Convention, 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 did not constitute a criminal offence prescribed by law. Article 7 of the Convention reads as follows:

“1.  No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.

2.  This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations.”

A.     Admissibility

1.    Submissions by the parties

25.  The Government argued that Article 7 was not applicable in the circumstances of the present case. In particular, the offence attributed to the applicants was administrative and the sanctions imposed on them by the Commission constituted administrative sanctions, not a “penalty” within the meaning of the Convention. In particular, the provision in question did not satisfy the criteria established in the Court’s case-law. Firstly, domestic law did not classify the offence as criminal. The terminology used in the provision was not that used in criminal-law provisions, nor was there in the Greek legal order a system of administrative criminal procedure law, such as the one referred to in Gradinger v. Austria (23 October 1995, Series A no. 328‑C). In addition, the degree of severity of the penalty provided for by the impugned legal provision was not such as to be considered of criminal law. Contrary to the Court’s judgment in Gradinger v. Austria (referred to above), the applicants in the present case had not run the risk of being put in prison, as the relevant law providing for the imprisonment of those who had a debt towards the State had been considered anti-constitutional.

26.  The Government further argued that Article 72 of Law no. 1969/1991 provided that both criminal and administrative sanctions could be imposed on persons who infringed it. In particular, criminal sanctions were imposed if the person disseminating the information had been aware of the nature of such information, and administrative sanctions were imposed irrespective of any culpability. That was further reinforced by Directive 2003/6/EC of the European Parliament and the Council of 28 January 2003 on insider dealing and market manipulation (market abuse). Its Article 14 § 1 provided:

“Without prejudice to the right of Member States to impose criminal sanctions, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible where the provisions adopted in the implementation of this Directive have not been complied with. Member States shall ensure that these measures are effective, proportionate and dissuasive”.

27.  Law no. 3340/2005 transposing that Directive into national law also provided for both criminal and administrative sanctions in cases of market manipulation.

28.  Having regard to the above-mentioned considerations, the Government argued that it was clear that the sanctions imposed by the Commission constituted administrative and not criminal sanctions within the meaning of the Court’s case-law. As regards the Supreme Administrative Court’s judgment holding that the sanctions imposed did not violate Article 7 of the Convention, one could not conclude from the Supreme Administrative Court’s reasoning that it had accepted that the aforementioned sanction fell within the criminal law. The Supreme Administrative Court had merely referred to cases to which Article 7 of the Convention applied, without specifically saying whether Article 72 § 2 of Law no. 1969/1991 included criminal sanctions or not.

29.  The applicants maintained that Article 7 of the Convention was applicable to the circumstances of the present case. They argued that the Supreme Administrative Court itself, in its judgment no. 109/2013, had acknowledged that Article 7 of the Convention was applicable to the sanctions imposed on them, as they constituted a “penalty” within the meaning of the Convention. Therefore, the domestic authorities had not disputed the applicability of Article 7 of the Convention.

30.  In any event, the applicants argued that the sanction provided for by the first sentence of Article 72 § 2 of Law no. 1969/1991 fulfilled the two most important criteria among the three established in the Court’s case-law. It applied to everyone who attempted to manipulate the market, and not to a specific part of the population, as opposed to the second sentence of the same Article; and it was not of a preventive nature but had a punitive aim, given that it did not provide for compensation for damages incurred by third parties or the Greek State.

2.    The Court’s assessment

(a)    General principles

31.  The guarantee enshrined in Article 7, which is an essential element of the rule of law, occupies a prominent place in the Convention system of protection, as is underlined by the fact that no derogation from it is permissible under Article 15 of the Convention in time of war or other public emergency. It should be construed and applied, as follows from its object and purpose, in such a way as to provide effective safeguards against arbitrary prosecution, conviction and punishment (see Ilnseher v. Germany [GC], nos. 10211/12 and 27505/14, §§ 202-09, 4 December 2018; Kafkaris v. Cyprus [GC], no. 21906/04, § 137, ECHR 2008; M. v. Germany, no. 19359/04, § 117, ECHR 2009; and Bergmann v. Germany, no. 23279/14, § 149, 7 January 2016).

32.  In addition, the Court has noted that the concept of “penalty” in Article 7 is autonomous in scope. To render the protection afforded by Article 7 effective, the Court must remain free to go behind appearances and assess for itself whether a particular measure amounts in substance to a “penalty” within the meaning of this provision (see G.I.E.M. S.R.L. and Others v. Italy [GC], nos. 1828/06 and 2 others, § 211, 28 June 2018; Welch v. the United Kingdom, 9 February 1995, § 27, Series A no. 307‑A; Jamil v. France, 8 June 1995, § 30, Series A no. 317‑B; and Del Río Prada, cited above, § 81). The wording of the second sentence of Article 7 § 1 indicates that the starting-point - and thus a very weighty factor (see Glien v. Germany, no. 7345/12, § 121, 28 November 2013, and Bergmann, cited above, § 150) - in any assessment of the existence of a penalty is whether the measure in question was imposed following conviction for a “criminal offence”. Other relevant factors are the characterisation of the measure under domestic law, its nature and purpose, the procedures involved in its making and implementation, and its severity (see Welch, cited above, § 28; Van  der  Velden v. the Netherlands (dec.), no. 29514/05, ECHR 2006‑XV; and Kafkaris, cited above, § 142). The severity of the measure is not, however, in itself decisive, since many non-penal measures of a preventive nature may, just as measures which must be classified as a penalty, have a substantial impact on the person concerned (see Welch, cited above, § 32; Del Río Prada v. Spain [GC], no. 42750/09, § 82, ECHR 2013; and Bergmann, cited above, § 150).

(b)    Application of the above-mentioned principles in the present case

33.  The Court has to ascertain whether in the present case the impugned measure, namely the fine imposed on the applicants by the Commission, should be regarded as a penalty within the autonomous meaning of Article 7. In this connection, the Court will examine (i) whether the fines were imposed following convictions for criminal offences; (ii) the procedure involved; (iii) the characterisation of the measure in domestic law; (iv) the nature and purpose of the measure; and (v) the severity of the measure.

34.  The Court notes first of all that, assessing the question under the criminal limb of Article 6, it found in Grande Stevens and Others v. Italy (nos. 18640/10 and 4 others, §§ 20, 53, 94-101, 4 March 2014), that the equivalent provisions under Italian law fell to be examined under the criminal limb of Article 6 of the Convention.

35.  Turning to the circumstances of the present case, the Court notes that the disputed measure was not imposed as a result of the applicants’ criminal conviction. In fact, the separate criminal proceedings instituted against the first applicant ended with his being acquitted of the charges related to fraud for the same period as the one for which he was sanctioned by the Commission.

36.  As regards the procedures for the adoption and enforcement of the measure in question, the Court notes that the measure was imposed by the Commission and subsequently reviewed by the administrative courts in proceedings which essentially fall within the ambit of administrative law (see G.I.E.M. S.R.L. and Others, cited above, §§ 228-32).

37.  Regarding the legal characterisation of the measure in domestic law, the Court observes that the market manipulation of which the applicants were accused was not set out in criminal law (contrast Gouarré Patte v. Andorra, no. 33427/10, § 30, 12 January 2016). Such conduct was in effect punishable by a penalty which was classified as “administrative” by Article 72 § 2 of Law no. 1969/1991 (see paragraph 17 above). Having said that, the Court must interpret the concept of a “penalty” in an autonomous manner (see G.I.E.M. S.R.L. and Others, cited above, § 216). It must thus consider whether any other factors lead to the conclusion that Article 7 is applicable in the present case (see also, for similar considerations on the criminal limb of Article 6, Grande Stevens and Others, cited above, § 95, and the cases cited therein).

38.  As to the nature of the offence, it appears that the provision which the applicants were accused of breaching was intended to guarantee the integrity of the financial markets and to maintain public confidence in the security of transactions. The Court notes that the Commission, an independent administrative body, has the task of supervising compliance with stock exchange legislation, and thus protecting investors and ensuring the effectiveness, transparency and development of the stock markets (see paragraph 5 above). These are general interests of society, usually protected by criminal law (see, mutatis mutandis, A. Menarini Diagnostics S.R.L. v. Italy, no. 43509/08, § 40, 27 September 2011; see also Société Stenuit v. France, report of the European Commission of Human Rights, 30 May 1991, § 62, Series A no. 232‑A). In addition, the Court considers that the fines imposed were essentially intended to punish, in order to prevent repeat offending. They had therefore been based on rules whose purpose was both deterrent, namely to dissuade the applicants from resuming the activity in question, and punitive, since they punished unlawful conduct (see, mutatis mutandis, Jussila, cited above, § 38).

39.  As to the nature and severity of the penalty which was “likely to be imposed” on the applicants (see Ezeh and Connors v. the United Kingdom [GC], nos. 39665/98 and 40086/98, § 120, ECHR 2003-X), the Court, like the Government (see paragraph 90 above), notes that the fines in question could not be replaced by a custodial sentence in the event of non‑payment (see, a contrario, Anghel v. Romania, no. 28183/03, § 52, 4 October 2007). However, the Commission was entitled to impose a fine of up to EUR 1,467,349.99 (see paragraph 17 above).

40.  It is true that in the present case the maximum penalties were not imposed. However, the criminal connotation of proceedings depends on the degree of severity of the penalty to which the person concerned is a priori liable (see Engel and Others v. the Netherlands, 8 June 1976, § 82, Series A no. 22), and not the severity of the penalty ultimately imposed (see Dubus S.A. v. France, no. 5242/04, § 37, 11 June 2009). Furthermore, in the present case the applicants ultimately received fines ranging from EUR 20,000 to EUR 100,000, which, given their amount, were of a certain severity and had significant financial implications for the applicants.

41.  In the light of the above, and taking account of the severity of the fines imposed and of those to which the applicants were liable, the Court considers that the penalties in question were criminal in nature (see, mutatis mutandis, Öztürk, cited above, § 54, and, a contrario, Inocêncio v. Portugal (dec.), no. 43862/98, ECHR 2001‑I).

42.  Moreover, the Court notes that, with regard to certain French administrative authorities which have jurisdiction in economic and financial law and enjoy sentencing powers, it has held that the criminal limb of Article 6 applied, in particular, with regard to the Disciplinary Offences (Budget and Finance) Court (Guisset v. France, no. 33933/96, § 59, ECHR 2000‑IX), the Financial Markets Board (Didier v. France (dec.), no. 58188/00, 27 August 2002), the Competition Commission (Lilly France S.A. v. France (dec.), no. 53892/00, 3 December 2002), the sanctions committee of the financial market supervisory authorities (Messier v. France (dec.), no. 25041/07, 19 May 2009), and the Banking Commission (Dubus S.A., cited above, § 38). The same finding was made in respect of the Italian regulatory authority responsible for competition and the market (the AGCM - Autorità Garante della Concorrenza e del Mercato; see Menarini Diagnostics S.r.l., cited above, § 44) and the National Companies and Stock Exchange Commission (see Grande Stevens and Others, cited above, § 101).

43.  After noting and giving due weight to the various aspects of the case, the Court considers that the fines imposed on the applicants can be regarded as “penalties” within the meaning of Article 7 of the Convention. This conclusion, which is the result of the autonomous interpretation of the notion of “penalty” within the meaning of Article 7, entails the applicability of that provision, even in the absence of criminal proceedings within the meaning of Article 6.

44.  The Court further finds that the applications are not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention. They are not inadmissible on any other grounds and must therefore be declared admissible.

B.     Merits

1.    The applicants’ arguments

45.  The applicants argued that Article 72 § 2 of Law no. 1969/1991 did not meet the requirements of foreseeability and precision and that they had erroneously been sanctioned for having breached it. Scholars and academics had published articles criticising the impugned legislation, and more specifically the impugned Article on the basis of which they had been sanctioned, for lack of clarity as to what behaviour could constitute dissemination or publication of false or misleading information. That was why the new provision which replaced Article 72 § 2 of that law in transposing Directive 2003/6/EC included a detailed account of ways in which the dissemination of false or misleading information could be achieved. It was by that new provision, Article 7 of Law no. 3340/2005, that it had been specified for the first time in legislation that market manipulation could be achieved by concluding transactions, as also mentioned in the introductory report on that law.

46.  The above-mentioned interpretation was further supported by the case-law of the Supreme Administrative Court. In particular, in 2006, the fourth Section of the Supreme Administrative Court had issued judgment no. 1898/2006, confirming that the entering into transactions by professional facilitators was only provided for by law in the second sentence of Article 72 § 2 of Law no. 1969/1991. It did not fall within the ambit of the first and third sentences, which only referred to disseminating or publishing false or misleading information.

47.  In view of the considerations mentioned above, the applicants could not have foreseen, in 2003 and 2004, that entering into transactions could be considered as a way of disseminating or publishing inaccurate information. The wording of the provision had been vague and ambivalent and the interpretations given by the domestic authorities at the time had been, at least, divergent. That lack of coherence meant that the provision had lacked the necessary clarity and precision required in order for the applicants to be able to regulate their behaviour accordingly. On the contrary, Article 34 of Law no. 3632/1928, which contained the criminal sanctions, was clearer, which was why the Council had acquitted the first applicant of those charges.

2.    The Government’s arguments

48.  The Government, relying on the Court’s judgments in A. Menarini Diagnostics S.R.L. (referred to above, § 65) and A and B v. Norway [GC] (nos. 24130/11 and 29758/11, § 133, 15 November 2016), argued, first of all, that the requirements of foreseeability and clarity as set out in Article 7 of the Convention did not apply with the same rigidity to administrative sanctions as they did to stricto sensu criminal sanctions. In any event, the impugned provision fully satisfied the requirements of Article 7 of the Convention. In particular, the above-mentioned provision, which sought to guarantee the smooth operation of the integrity of the financial markets and to protect investors, provided for the imposition of a fine for the publication or dissemination “in any way” of inaccurate or misleading information which, by its nature, could influence the price or marketability of securities that were to be listed or were already listed in a stock market.

49.  The general wording employed by the legislator in order to describe the objective element of the offence could not be regarded as contrary to Article 7 of the Convention, having regard to the fact that, on the one hand, under domestic classification the said provision belonged to administrative law and, on the other hand, the legislator had sought to provide a general framework to cover various ways of disseminating or publishing information in the dynamically expanding sector of stock exchange law.

50.  In the Government’s view, the legislator had purposely avoided providing an indicative list of actions that could constitute publication or dissemination of information in order to avoid any interpretative limitation thereof. If one compared the previous version of the impugned provision with the one that had eventually replaced it, that is to say with Article 96 of Law no. 2533/1997, it was easily understood that the legislator had intended to broaden the scope of the objective element in order to include behaviour such as that of the applicants, as confirmed by the travaux préparatoires to Law no. 2533/1997. The fact that the subsequent version of that provision was more detailed did not mean that the applicants’ conduct, which was later included expressis verbis in the law, had not formerly been a punishable offence.

51.  The Government further pointed out that one could infer, simply by looking at the second sentence of the same Article of Law no. 1969/1991, that the legislator had intended to include the conduct of transactions as a way of disseminating information. That sentence provided that no sanction should be imposed on professional facilitators for conducting transactions unless they knew or ought to have known that they were attempting to disseminate false or misleading information by making those transactions. The wording of that provision proved that the legislator considered it a given that the dissemination of false or misleading information could be achieved through transactions and wished to protect facilitators acting not on their own behalf but on behalf of their clients.

52.  The Government additionally argued that the applicants, who were at the time president and chief executive officer (the first applicant) and an employee responsible for transmitting clients’ orders to collaborating securities companies (the second applicant), should have, by virtue of their positions, exercised enhanced due diligence in their stock market exchanges and could easily have foreseen that the activities in which they had been engaged were liable to mislead investors and thus fell within the scope of Article 72 § 2 of Law no. 1969/1991. The Commission had imposed several sanctions for transactions in breach of that Article as early as 2000, without any reservation as to the correct interpretation of the impugned provision which could have led the applicants to question its true meaning. In addition, the Government referred to several domestic judgments issued in 2002, arguing that, by the time the applicants had committed the offence, the administrative courts had issued judgments interpreting the provision in question as including the behaviour displayed by the applicants.

53.  The Government acknowledged that following the sanction imposed on the applicants, the Supreme Administrative Court had published judgment no. 1898/2006, adopting the opposite interpretation of Article 72 § 2 of Law no. 1969/1991 and holding that disseminating information could not be achieved by entering into transactions. In the end, due to the conflicting interpretations of the Article in question existing in the case-law, the matter had been referred to a seven-member panel of the Supreme Administrative Court, which had resolved the issue by adopting judgments no. 109-11/2013 (see paragraph 12 above). In any event, the applicants could not pretend that the above-mentioned variation in case-law had somehow affected them, as at the time they had committed the offence, the case-law had been consistent in including the conduct of transactions in the ways in which false information could be disseminated and, thus, in breaching Article 72 § 2 of Law no. 1969/1991.

54.  Lastly, the Government submitted that the above-mentioned interpretation of Article 72 § 2 was in line with the interpretation given to Article 34 subparagraph a) of Law no. 3632/1928. In particular, the criminal courts had held that the conduct of pre-arranged large-scale trading constituted dissemination of false or inaccurate information which could mislead investors regarding the real demand of securities.

3.    The Court’s assessment

(a)    General principles

55.  The Court reiterates that the guarantee enshrined in Article 7 of the Convention is an essential element of the rule of law. It should be construed and applied, as follows from its object and purpose, in such a way as to provide effective safeguards against arbitrary prosecution, conviction and punishment (see Scoppola v. Italy (no. 2) [GC], no. 10249/03, § 92, 17 September 2009, and Huhtamäki v. Finland, no. 54468/09, § 41, 6 March 2012). Article 7 of the Convention is not confined to prohibiting the retroactive application of criminal law to the disadvantage of an accused. It also embodies, more generally, the principle that only the law can define a crime and prescribe a penalty (nullum crimen, nulla poena sine lege) and the principle that criminal law must not be extensively construed to the detriment of an accused, for instance by analogy. From these principles it follows that an offence must be clearly defined in law. This requirement is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, what acts and omissions will make him criminally liable. When speaking of “law”, Article 7 alludes to the very same concept as that to which the Convention refers elsewhere when using that term, a concept which comprises written as well as unwritten law and implies qualitative requirements, notably those of accessibility and foreseeability (see, among other authorities, C.R. v. the United Kingdom, 22 November 1995, §§ 32‑33, Series A no. 335‑C; S.W. v. the United Kingdom, 22 November 1995, §§ 34‑35, Series A no. 335‑B; Streletz, Kessler and Krenz v. Germany [GC], nos. 34044/96, 35532/97, 44801/98, § 50, ECHR 2001-II; and Kafkaris, cited above, § 140).

56.  In any system of law, including criminal law, however clearly drafted a legal provision may be, there is an inevitable element of judicial interpretation. There will always be a need for elucidation of doubtful points and for adaptation to changing circumstances. Indeed, in the Convention States, the progressive development of the criminal law through judicial law-making is a well-entrenched and necessary part of legal tradition (see Del Río Prada v. Spain [GC], no. 42750/09, §§ 91‑93, ECHR 2013). Article 7 of the Convention cannot be read as outlawing 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 (see, among other authorities, S.W. v. the United Kingdom, cited above, § 36; Streletz, Kessler and Krenz, cited above, § 50; K.-H. W. v. Germany [GC], no. 37201/97, § 45, ECHR 2001‑II; and Rohlena v. the Czech Republic [GC], no. 59552/08, § 51, ECHR 2015).

57.  A law may still satisfy the requirement of “foreseeability” where the person concerned has to take appropriate legal advice to assess, to a degree that is reasonable in the circumstances, the consequences which a given action may entail (see Achour v. France [GC], no. 67335/01, § 54, ECHR 2006‑IV, and Huhtamäki, cited above, § 44). Even when a point is ruled on for the first time in an applicant’s case, a violation of Article 7 of the Convention will not arise if the meaning given is both foreseeable and consistent with the essence of the offence (see Jorgic, cited above, § 114; Custers and Others v. Denmark, nos. 11843/03, 11847/03 and 11849/03, 3 May 2007; Soros v. France, no. 50425/06, § 126, 6 October 2011; and Huhtamäki, cited above, § 51).

58.  Moreover, in accordance with its general approach, the Court does not question the interpretation and application of national law by national courts unless there has been a flagrant non-observance or arbitrariness in the application of that law (see, inter alia, Société Colas Est and Others v. France, nos. 37971/97, § 43, ECHR 2002-III; Korbely v. Hungary [GC], no. 9174/02, §§ 73-95, ECHR 2008; and Liivik v. Estonia, no. 12157/05, § 101, 25 June 2009).

59.  However, the Court’s powers of review must be greater when the Convention right itself, Article 7 in the present case, requires that there was a legal basis for a conviction and sentence. Article 7 § 1 requires the Court to examine whether there was a contemporaneous legal basis for an applicant’s conviction and, in particular, it must satisfy itself that the result reached by the relevant domestic courts was compatible with Article 7 of the Convention. To accord a lesser power of review to this Court would render Article 7 devoid of purpose (see Kononov v. Latvia [GC], no. 36376/04, § 189, ECHR 2010 and Rohlena v. the Czech Republic [GC], no. 59552/08, § 52, ECHR 2015).

(b)    Application of the above-mentioned principles in the present case

60.  In the light of the above-mentioned principles, the Court notes that it is not its task to rule on the applicants’ individual responsibility, that being primarily a matter for the domestic courts, but to consider, from the standpoint of Article 7 § 1 of the Convention, whether the acts for which the applicants were sanctioned fell within a definition of an offence which was sufficiently foreseeable, given that its accessibility has not been contested by the applicants.

61.  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.

62.  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 (see, a contrario, Navalnyye v. Russia, no. 101/15, § 68, 17 October 2017). 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.

63.  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 (see paragraph 21 above concerning judgment 1898/2006 of the Supreme Administrative Court), 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 (cited above), 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 (ibid., § 44). 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 (see Khodorkovskiy and Lebedev v. Russia, nos. 11082/06 and 13772/05, § 221, 25 July 2013). 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 (see, in this regard, K.A. and A.D. v. Belgium, nos. 42758/98 and 45558/99, § 55, 17 February 2005, in which the Court held that no decisive importance should be attached to a lack of comparable precedents).

64.  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 (see, for example, K.A. and A.D., cited above, § 59, and Alimuçaj v. Albania, no. 20134/05, §§ 158-60, 7 February 2012), the fact that writers have freely interpreted a statute cannot replace the existence of a body of case-law (see Dragotoniu and Militaru-Pidhorni, cited above, § 43).

65.  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 (see Kononov v. Latvia [GC], no. 36376/04, § 235, ECHR 2010). 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.

66.  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 (see paragraph 18 above). 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 (see paragraphs 22 and 18 above). 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.

67.  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.

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

III. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

69.  The first applicant, in his observations submitted on 4 December 2018, raised a complaint under Article 4 of Protocol No. 7 to the Convention. In particular, he argued that the administrative sanction imposed on him had violated his right not to be tried twice, having regard to the fact that he had already been acquitted by decision no. 2655/2007 of the Indictment Division for the same offence as provided for by Article 34 of Law no. 3632/1928 (see paragraph 16 above). However, the Court notes that this complaint was first raised by the applicant in his observations dated 4 December 2018, and therefore should be rejected as having been lodged outside the six-month time-limit.

FOR THESE REASONS, THE COURT, unanimously,

1.      Decides to join the applications;

2.      Declares the complaint under Article 7 of the Convention admissible and the remainder of the applications inadmissible;

3.      Holds that there has been no violation of Article 7 of the Convention.

Done in English, and notified in writing on 28 May 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Abel Campos                                                                        Ksenija Turković
     Registrar                                                                                President