Deciding on an appeal against administrative sanctions imposed by Consob (the national Commission for companies and the Stock Exchange), the Supreme Court has recently ruled (see judgement no. 17673 of 31 May 2022) that the judge deciding on an appeal against sanctionary measures must assess the appropriateness of the time spent by the supervisory authority in question to collect the sources of evidence and determine whether there has been an unjustifiable delay and/or a prolonged inactivity by such authority.
Pursuant to Article 14, paragraph 2, of Law 24 November 1981 no. 689, the time-limit for notifying the alleged violation of an administrative provision starts to run when the supervisory authority has completed the preliminary investigation aimed at ascertaining the existence of the subjective and objective elements of the alleged unlawful act.
In the case at issue, the appellants claimed that the Court of Appeal had failed to ascertain whether the additional investigative activities carried out by Consob were necessary or not, and argued that those activities had put forward the time-limit for contesting the unlawful act.
In this regard, the Court of Cassation has ruled that, in proceedings against administrative sanctions pursuant to the Consolidated Financial Act (namely, Legislative Decree 24 February of 1998 no. 58, as amended) and implementing provisions, the competent judge – where the issue concerns the time by which the allegedly unlawful act was ascertained – must assess the necessity and appropriateness of further investigative activities carried out by the supervisory authority (in such case, Consob).
As a result, the competent judge may conclude for the unreasonableness of a (unnecessary or rambling) investigation, taking into account the following parameters:
- the potential usefulness of such further investigation, and not the effective results thereof; as well as
- the authority’s interest in conducting a unitary investigation, even if represented by several persons’ actions carried out at different times.
Finally, the Supreme Court has ruled that the competent judge is entrusted with full cognisance of the lawfulness and legitimacy of the sanctionary measures, including their amount.
In respect of the latter, the Supreme Court has applied the principle of law enshrined in the Constitutional Court’s decision no. 63 of 21 March 2019 whereby the supervening rules, which retroactively provide for a more favourable sanctioning treatment, must be applied ex officio by the judge.
Accordingly, in the case under examination, the Court of Cassation has reduced the amount of the sanctions initially imposed by Consob (and confirmed by the Court of Appeal).