Background
Between April and December 2015, Mr. [Z] [P] gave Crédit Agricole Normandie-Seine several orders to buy and sell securities issued by Greek banks. He traded both in his own name and, under a power of attorney, on behalf of his mother, Ms. [M] [P].
After the securities were resold at a loss, mother and son sued the bank for damages, alleging breaches of its duties to provide information and warnings. The Rouen Court of Appeal rejected their claims on June 12, 2025, relying in part on specific risk warnings that the bank’s representative had given Mr. [P] before the orders were transmitted.
The Court’s Holding
The Court of Cassation held that a bank acting as an investment-services provider must personally inform each client of the risks arising from speculative transactions. Informing the client’s agent does not discharge that obligation, even when the agent holds authority to conduct the transactions for the client.
The appellate court therefore erred by rejecting Ms. [P]’s claim based on warnings given to her son. Because the bank was required to inform Ms. [P] personally of the contemplated transactions’ risks, the Court partially quashed the judgment only insofar as it rejected her damages claim and remanded that issue to the Caen Court of Appeal. The Court declined to address the plea’s second and third branches in a specially reasoned decision because they were manifestly incapable of producing cassation.
Key Takeaways
- An investment-services provider’s duties of information and warning are owed personally to the client undertaking the speculative investment.
- Risk warnings given to an authorized agent do not substitute for warnings to the principal.
- The ruling was limited to Ms. [P]’s damages claim, which will be reconsidered by the Caen Court of Appeal.
Why It Matters
The decision clarifies that banks cannot rely solely on communications with an attorney-in-fact when fulfilling their duties of information and warning for speculative trades. Where one person places orders for another under a power of attorney, the bank must still ensure that the client personally receives the relevant risk information and warnings.