A new ‘naming and shaming’ regime for financial markets: striking a balance

‘Naming and shaming’ has a long-standing reputation as an effective enforcement tool in the supervisory toolkit of Dutch supervisory authorities. This includes the financial supervisory authorities the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB). Part of this toolkit is the immediate publication of an administrative fine as soon as it has been imposed, i.e. before the administrative sanction has become final. The sanction decision will be published via the supervisory authority’s website, a press release and, more recently, even through Twitter, explicitly stating the name of the alleged violator. Such a publication is felt as a severe penalty for market participants as it causes reputational damage, which is often considered more punitive than the underlying pecuniary sanction.

The publication regime has been heavily criticised, as publication was not considered a ‘criminal charge’ and (therefore) the publication decision lacked legal protection, thus conflicting with the presumption of innocence. Due to recent harmonisation, the publication regime has been subject to changes which seem to enshrine the presumption of innocence.

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