Accounting fraud, alleged loss resulting from inducement to invest

In the event of false accounting by the issuing company, inducing an investment constitutes a simple presumption of a causal link between the untruthful information and the loss suffered by the investor, in accordance with the same principle applicable to false statements in a prospectus. Nor can the loss be ruled out simply because the investor did not seek out or consider information on the issuer and its financial products by consulting other sources.

The Court of Cassation (judgement 25060/2026) has upheld the appeal seeking recognition of the right to damages in respect of the purchase of 49,000 shares in Unipolsai Assicurazioni Spa, formerly Fondiaria Sai Spa, following misleading information provided by the issuer, both through false financial statements and false information in the prospectus, in connection with a capital increase. This claim had been upheld at first instance but dismissed on appeal. The regional court had denied the existence of any loss, primarily on the basis of an erroneous assumption regarding the burden of proof. In the view of the appeal judges, it was incumbent upon the investor to demonstrate that the unlawful presentation of the financial and economic position as set out in the financial statements had had a decisive impact on his investment decisions. This was also in light of the assessment of any warning signs.

The Supreme Court has quashed the contested decision and remanded the case. The Supreme Court judges point out that, where an investor brings a claim against the issuing company on the grounds of false financial statements, the same principle applies as in the case of false statements in a prospectus, according to which ‘the inducement to invest resulting from the false statements constitutes a simple presumption regarding the existence of a causal link’. Nor is it correct to ‘blame’ the claimant for having ignored the rating downgrades and other external factors that might have alerted him. There is, in fact, a simple presumption regarding the link between the tortious act and the damage, thanks to the existence of a document – the prospectus – which is subject to public scrutiny and serves an informative function for the recipients of the investment solicitation. This is intended to balance the information asymmetry in favour of the investor and enable them to make an informed choice.