Facts

Parties and procedural history:

The complainant [A.] , sole shareholder and sole authorized signatory of the [B. AG] , appealed against three rulings of the Swiss Financial Market Supervisory Authority (FINMA) dated 17 December 2015 and 20 June 2017. The subject matter of the rulings was:

  • The finding of unauthorized activity as a securities dealer (proprietary trading) by [B. AG] without authorization (Art. 53 FINMASA, Art. 3 SESTA);
  • The order for the liquidation of [B. AG] ;
  • The cease-and-desist instruction to [A.] to refrain from any activity requiring authorization in securities trading;
  • The finding of market manipulation by [B. AG] and [A.] in the period 2012–2014;
  • The confiscation of profits from market manipulation in favor of the Swiss Confederation;
  • The imposition of an activity ban (8 years) and professional ban (5 years) against [A.] .

The Federal Administrative Court confirmed the FINMA rulings with judgment dated 27 February 2020 (B-4757/2017), insofar as they concerned [A.] . Against this judgment, [A.] filed an appeal with the Federal Supreme Court (2C_315/2020).

Considerations

1. Admissibility of the appeal and procedural issues:

The Federal Supreme Court admitted the appeal insofar as [A.] was affected in its own protectable interests. The proceedings concerning the subjection of [B. AG] and the market manipulation were handled separately, as they involved different legal questions and legal consequences. The objection of procedural delay was dismissed, as the duration of the proceedings (2013–2020) was deemed reasonable in view of the complexity and the conduct of the complainant (numerous submissions and applications).

2. No application of criminal procedural guarantees:

The measures taken by FINMA (activity ban, professional ban, disgorgement of profits) were qualified as administrative sanctions and not as criminal measures within the meaning of Art. 6 ECHR. The Federal Supreme Court relied on the so-called "Engel criteria" (ECtHR, Engel v. the Netherlands) and the case law (BGE 142 II 243). The sanctions served to protect the functioning of the financial markets and investors, not to punish. Therefore, the presumption of innocence, the right against self-incrimination and rules on the exclusion of evidence did not apply. Instead, the principle of free assessment of evidence in administrative proceedings applied.

3. Market manipulation and legal assessment:

The Federal Supreme Court confirmed the finding of market manipulation by [A.] pursuant to Art. 33f former SESTA (in force 2013–2015). The lower court had demonstrated that [A.] had systematically sent false signals in the market through so-called "spoofing", "layering" and "ramping" and had cancelled orders shortly thereafter to…