On 19 November 2025, the Commercial, Financial and Economic Chamber of the Court of Cassation rendered an important ruling (No. 587 F-B) in a case opposing the company Patrimoine conseil, a financial investment advisor, against the company Financiere Gotreau, marking a key stage in the litigation related to the infamous Luxalpha SICAV. This case highlights the strict requirements of French law regarding the scope of banking and financial canvassing mandates (mandats de demarchage bancaire et financier).
The Facts: A Dangerous Investment in the Wake of the Madoff Fraud
The case began on 22 December 2005, when the company Patrimoine conseil (also known under the trade name Anthea), an intermediary in financial operations, signed a canvassing mandate (mandat de demarchage) with Rothschild & Cie Gestion (RCG). This mandate authorized Patrimoine conseil to canvass clients for the subscription of units and shares of Collective Investment Schemes (Organismes de Placement Collectif de Valeurs Mobilieres – OPCVM) referenced by RCG. The list of these OPCVM was to be available for consultation and updated “periodically at the end of each month” on RCG’s internet server.
On 1 December 2006, the company Financiere Gotreau invested a significant sum (approximately 6,000,000 euros) in shares of the Luxalpha SICAV (Societe d’Investissement a Capital Variable – open-ended investment company under Luxembourg law) on the proposal of Patrimoine conseil.
However, this Luxembourg investment fund created by UBS had massively invested in Bernard Madoff’s fraudulent scheme, a vast swindle in the form of a “Ponzi scheme”. When the Madoff fraud was exposed in 2008, the fund collapsed, causing enormous losses for investors.
Financiere Gotreau suffered an investment loss of 3,594,000 euros and subsequently received 1,581,142.88 euros from the [J] Victims’ Fund.
The Liability of Patrimoine Conseil: Unlawful Canvassing
The dispute crystallized around the question of whether Patrimoine conseil was authorized, through its mandate, to market specifically the Luxalpha SICAV.
The Decision of the Court of Appeal of Rennes (CA Rennes, 2 April 2024, RG No. 20/04278)
The Rennes Judicial Court had initially ordered Patrimoine conseil to pay 2,609,877.57 euros in 2020. On appeal, the Rennes Court partially reversed this decision.
- Breach of Mandate: The Court of Appeal recalled Article L. 341-13 of the Monetary and Financial Code, which prohibits the canvasser from offering products for which he has not received express instructions from his principal. Patrimoine conseil, although claiming that the Luxalpha SICAV appeared on the list of OPCVM referenced by RCG, was unable to produce the table of referenced OPCVM current as of the date of the investment (1 December 2006).
- Acting Outside Mandate: Failing to demonstrate an express mandate for this specific product, the Court of Appeal held that Patrimoine conseil was deemed to have acted outside its mandate. The canvassing was therefore unlawful and had contributed to the loss of the investment. The court rejected the analysis of “extrinsic evidence” (such as the execution of orders by RCG or commissions received) to prove the existence of the express mandate.
- Damages (Investment Loss): Patrimoine conseil was ordered to repay the entire investment loss after deduction of the compensation already received by Financiere Gotreau from the [J] Victims’ Fund, i.e., 2,012,857.12 euros.
- Loss of Profit: The Court of Appeal also awarded Financiere Gotreau the sum of 200,000 euros for loss of profit. It considered that if the investment had not been made, Financiere Gotreau could have been directed towards a risk-free SICAV investment, allowing it to expect a return of approximately 100,000 euros per year over the period from December 2006 to December 2008.
It should be noted that the Court of Appeal rejected the other allegations of breach of information and advisory obligations, considering that they did not give rise to certain loss. Since the collapse was due to the fraud, information about risks could not have addressed the fraud, which was only revealed on 12 December 2008.
The Decision of the Court of Cassation (Cass. Com. 19 November 2025, No. 24-16.094)
Patrimoine conseil filed a cassation appeal, challenging the Court of Appeal’s reasoning regarding the scope of the mandate.
Confirmation of the Fault for Unlawful Canvassing
The Court of Cassation, examining the main appeal, ruled that the Court of Appeal had correctly deduced that Patrimoine conseil had acted outside its mandate and committed a fault engaging its tortious liability (responsabilite delictuelle). It reaffirmed that it was for the canvasser (Patrimoine conseil) to establish that it had received a mandate to distribute the products offered. The inability to produce the table of referenced OPCVM as of the date of acquisition of the Luxalpha SICAV justified this finding. The ground raised by Patrimoine conseil on this point was not upheld.
Cassation on Loss of Profit
However, the Court of Cassation examined the cross-appeal of Financiere Gotreau, which challenged the limitation of compensation for loss of profit.
The Court of Cassation recalled the principle of full compensation for loss (Article 1382 former of the Civil Code). It criticized the Court of Appeal for limiting Financiere Gotreau’s compensation to the period from December 2006 to December 2008 (i.e., 200,000 euros), without justifying why the loss of chance of receiving the sums that another investment would have generated would have ceased on that latter date.
Consequently, the Court of Cassation partially quashed and annulled the Court of Appeal’s judgment, only with regard to the limitation of the award for loss of profit. The case will be referred to the Court of Appeal of Rennes, differently composed, to reassess the calculation of this compensation.
Lessons from the Case
This case serves as a stern reminder for all intermediaries in financial operations:
- Requirement of Express Written Mandate: Even if a general mandate for a category of products (OPCVM/SICAV) exists, the exact scope of products authorized for marketing must be proven, in accordance with the “express instructions” required by Article L. 341-13 of the CMF.
- Proof of Referencing: Patrimoine conseil’s inability to produce the updated list of referenced OPCVM, even if it was once available online, proved fatal.
- Full Compensation: The Court of Cassation insists that compensation for loss of chance must restore the victim to the position they would have been in without the fault, and must be justified for the entire relevant period, not arbitrarily limited.
