The National Securities Market Commission (CNMV) insists on shielding the sanctioning file against Josep Borrell, who was fined for selling Abengoa shares with privileged information when he was a director. The agency will not publish parts of the dossier despite the fact that the National High Court and the Supreme Court have agreed with Transparency and ruled that it was not confidential. The CNMV now considers that, despite the fact that the fine was published in the BOE, that was not a public reprimand and therefore needed the permission of the High Representative of the EU to publish it. Borrell has opposed it and the CNMV considers that this is how he “scrupulously” complies with the two sentences that he has lost.
In November 2015, and as a director of Abengoa, Borrell sold 9,030 euros in shares of his ex-wife. He did it, according to the CNMV, with relevant information that had not yet been published and that days later led Abengoa to file bankruptcy proceedings. In that period of time, Abengoa’s shares fell 65%. Three years later, and already being foreign minister, Borrell was fined 30,000 euros. The sanction, very serious, was published in the Official State Gazette. He paid and did not appeal the fine to justice. He considered that it had been an error but was dissatisfied with the CNMV’s resolution.
Then, a journalist requested the complete file through the Transparency portal to find out the details of the CNMV investigation. The public body refused and Transparency gave it protection. The Council of Transparency and Good Governance (CTBG) asked that Borrell be asked for his opinion, but that his opinion was not binding to decide whether to publish it. Transparency did not insist on making the entire file public, but rather that the CNMV ask Borrell, decide which parts were not confidential and publish them.
Shortly after, in 2019, the CNMV approved an internal regulation that considered that “any report, document, data or other information available to the CNMV as a result of the exercise of functions will be reserved or confidential”. The stock market regulator thus shielded itself from requests of this type, refused to comply with what Transparency requested and resorted to justice. First, to the National Court, which in October 2020 ruled that “not all the information collected by the supervisory authority can be considered confidential.”
The body in charge of overseeing the market then went to the Supreme Court. It argued that “all the information obtained in the exercise of its supervisory and inspection functions, and by extension that included in the sanctioning files initiated as a result of said functions, is confidential and reserved.”
The CNMV insisted that in its files “the Transparency Law cannot be applied”. He considered that the Stock Market Law and the Transparency Law were incompatible. It even warned of a serious problem for Spain if it made the file public: it warned of an “obvious risk for the supervision of the financial markets since the Member States share supervisory information with the CNMV, so there is a risk that they will not want to share their confidential information.” Transparency replied that not all the documents handled by the CNMV can be confidential.
On March 10, the Supreme Court dismissed the CNMV’s appeal. The ruling does not accept that all the information handled by the supervisory body can be considered confidential. The directives cited by the CNMV and the jurisprudence “only establish the duty of secrecy with respect to confidential information, and, therefore, it is not applicable to the rest of the information handled by these authorities that should not have such consideration”. He considers that, by following this criterion, the CNMV would be falling outside the Transparency Law.
The Supreme Court cites a ruling by the EU Court of Justice that has already addressed the matter and concluded: “Information held by the competent authorities that could constitute trade secrets, but is at least five years old, must, in principle, be due to the passage of time, to be considered historical and, therefore, to have lost its secret or confidential nature, unless, exceptionally, the party invoking this nature demonstrates that, despite its antiquity, said information continues to constitute an essential element of its commercial position or that of interested third parties. The Supreme indicates that an internal regulation “is not an adequate instrument” to limit or condition the exercise of the rights of citizens.”
In its ruling, it dismantles the CNMV’s arguments: “Not all information that appears in a file of a financial supervisory authority must be considered confidential information covered by the obligation to keep professional secrecy. For this, it is necessary that it meets certain requirements: a) that it is not public b) that its disclosure may be detrimental to the interests of the person who provided it or third parties or that it affects the correct functioning of the system for monitoring the activities of investment services companies.
With that sentence against, the case returned to the CNMV. The body gave an audience to Borrell, a procedure that Transparency had considered mandatory but not binding, and that it had never carried out. The High Representative of the EU objected: “Based on the provisions of article 15.1 of the Transparency Law, which provides that if the requested information included data related to the commission of administrative offenses that do not entail public reprimand, access only It may be authorized with the express consent of the affected party, I inform you that I do not give my consent for the documentation contained in the sanctioning file that is the object of said sentence to be provided.”
That article of the law that Borrell cites establishes that “if the information […] contains data related to the commission of criminal or administrative offenses that do not entail a public reprimand to the offender, access may only be authorized if there is the express consent of the affected party or if it is covered by a rule with the force of law ”.
The sanction against Borrell was published in the Official State Gazette as required by law as it is a very serious infraction. But the CNMV now interprets that this is not a “public warning to the offender”. In its response to the journalist, the body insists over and over again that something published in the BOE is not a public reprimand: “It cannot in any way be argued that the sanctioning procedure entails a public reprimand of the offender for the fact of publication in the BOE”. “The public warning cannot be equated with the publication of sanctions.”
The key is that if it is not a public reprimand and the publication in the BOE is something else, the CNMV and Borrell can benefit from the exception of the law. “There is a clear limit to access in cases where the request for information refers to data on administrative offenses that do not entail a public reprimand for the offender,” argues the CNMV. “In the present sanctioning file, only the sanction of a fine was imposed on Mr. Borrell Fontelles, and in no case that of a public reprimand.”
So on June 9, despite the Supreme Court ruling, and with a new argument, the CNMV shielded Borrell’s file. “Given that in the present case personal information of a natural person is requested, related to the commission of an administrative infraction that does not entail a public reprimand and does not contain the express consent of the affected party that allows the dissemination of the requested information, it must be denied. the request made”.
In response to this newspaper, the CNMV affirms that it thus considers the Supreme Court’s sentence fulfilled. “The ruling of the TS obliges the CNMV to apply the legal regime of transparency for this type of files. The CNMV is scrupulously executing, as could not be otherwise, that sentence, which consists of applying the transparency regulations themselves, which contemplates different assumptions when it comes to attending to the specific requests that are received. We do not expand or comment on the specific responses or resolutions.”
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