The relationship between a client and their bank, particularly when the latter acts in the capacity of a wealth management advisor, is governed by strict obligations, including duties of advice and duty to warn. However, the bank’s liability is not unlimited, especially when the client takes high-risk investment initiatives outside of the products offered by the institution.
A recent decision by the Rennes Court of Appeal, dated 7 October 2025 (No. 23/01966), sheds light on the conditions under which a bank’s liability may be established or dismissed in the face of disputed investments made by its client, particularly in the context of cryptocurrencies.
1. The Crucial Distinction: Investment Proposed by the Bank vs. Client’s Own Initiative
The fundamental principle upheld by case law is that the banker’s liability toward their client differs depending on whether the investment was or was not proposed by the bank.
In the case decided by the Rennes Court of Appeal, Mr. [K] and his company sought compensation from Credit Mutuel, alleging breaches of the duties of advice and vigilance following massive cryptocurrency investments through external platforms (Verticoin and Union Crypto).
It was undisputed that the contested investments had been made by Mr. [K] on his own initiative. The client had discovered these opportunities through a Facebook advertisement and media reports, and was subsequently contacted by representatives of the platforms.
In this context, Credit Mutuel had in no way acted in the capacity of a financial investment advisor regarding these external investments.
2. The Duty of Advice: A Restricted but Maintained Scope
Although the bank had not advised on the external cryptocurrency investments, Mr. [K] was entitled to seek its liability for breaches of its advisory obligations in wealth management. The possibility of holding the banker liable, even for external transactions, was explained here by the fact that certain disputed wire transfers involved funds that had initially been invested on the bank’s advice, and whose management was overseen by the advisors.
However, for the banker’s liability to be established, a breach of this duty must be proven.
Proof of the Duty to Warn
The Court of Appeal examined whether the bank had fulfilled its duty to warn in its capacity as a wealth management advisor.
The bank proved its diligence:
- Immediate and Regular Warnings: It appears from the advisors’ sworn statements that they warned Mr. [K] about the risks of transactions on cryptocurrency platforms as soon as they became aware of them.
- Formalization of Warnings: Following Mr. [K]’s transmission of an email about the advantages of Bitcoin (21 January 2018), the advisor sent him back, as early as 30 January 2018, a template letter inviting him to acknowledge having been informed of the risks and consequences of investing abroad, the risk of total loss, and having been warned about the risks of fraud and scam that his advisor had “strongly advised against.” This document, even unsigned by the client, confirmed the existence of prior warnings.
- Subsequent and Formal Warning: Credit Mutuel also produced a registered letter dated 13 February 2018 (the content of which was consistent with the January email) informing Mr. [K] of the risks of fraud and scam, referring to prior exchanges, and reminding him that the risk of total loss was real.
3. Factors Exonerating the Bank
Several elements led the Court to conclude that there were no breaches attributable to the bank:
- The Client’s Investor Profile: Mr. [K] had himself declared that he was experienced in all forms of financial products and had accepted a high degree of capital risk in exchange for a high level of risk. This profile was deemed consistent with his choice to disregard the advisors’ warnings.
- The Limits of the Investor Profile: The criticism that the bank had allowed investments exceeding 10 to 25% of his assets (according to his investor profile) was rejected. The trial judges recalled that this profile only applied to investment transactions carried out through and on the advice of the bank, and not to those that Mr. [K] carried out on his own initiative with external operators.
- The Client’s Persistent Intent: Mr. [K] was seeking high returns and had declined the bank’s proposals, which he considered insufficiently profitable. Moreover, after a formal warning from the bank in April 2018, he proceeded with further wire transfers to other foreign platforms, demonstrating his intent to continue these investments despite the flagged risks.
In this case, since the bank had fulfilled its duties of information and warning, and the client had acted knowingly and of his own volition, no breaches attributable to the bank were established with respect to its wealth management advisory obligation.
4. The Account Holder’s Duty of Vigilance
In addition to the duty of advice, the Court also dismissed any breach of the duty of vigilance.
The banker is bound by the duty of non-interference in the client’s accounts and affairs, except in the event of material or intellectual anomalies. As a mere account holder, the bank is not required to assess the appropriateness or dangerousness of transactions requested by the client if they are authorized.
In the present case, the wire transfers, although frequent and substantial, presented no anomaly warranting the bank’s interference:
- They were consistent with the client’s wishes.
- They presented no formal or material anomaly.
- The fact that the wire transfers required ceiling increases was not an anomaly, as these transactions were consistent with Mr. [K]’s intention to invest large amounts in cryptocurrency, an intention known to the bank, which had warned him of the risks.
- The fact that the beneficiary accounts were domiciled abroad is not, in itself, an indicator of anomaly for dematerialized investments.
Conclusion
The Rennes Court of Appeal decision provides an insightful analytical framework: the bank’s liability in its capacity as a wealth management advisor for external investments is not established where it proves it fulfilled its duties of information and warning, and where the client, even if seeking high returns, pursued transactions on their own initiative despite repeated warnings.
The banking institution was exonerated of all alleged breaches, and the trial court judgment was upheld in its entirety.
Conversely, in light of the exoneration conditions discussed, the bank’s liability in its capacity as a wealth management advisor could be established if the breaches fell within one of the following areas:
Breach of Direct Advisory and Suitability Obligations
The bank’s liability would be established if the disputed investment had been proposed by the bank itself. In such a case, the strict rules of suitability and information would fully apply. The bank would breach its duty of advice if, for example, it proposed a high-risk investment to its client without ensuring that it matched the client’s investor profile, particularly in terms of risk capacity or the percentage of investment relative to overall assets (the 10 to 25% limits being applicable only to transactions carried out on the bank’s advice). The banker would also be liable if it failed to provide the required advice in the management of funds initially invested on its own recommendations.
Absence or Insufficiency of the Duty to Warn
Unlike the situation adjudicated here, where the bank proved it had “strongly advised against” and warned of the risks of “fraud and scam,” the bank would be at fault if it failed to prove that it had fulfilled its duties of information and warning. These warnings must be clear and issued as soon as the risky or dubious transactions come to its attention, without waiting for the client to carry out massive transactions. If the client had continued their transactions without ever receiving formal warnings from the bank (emails or registered letters) or if the bank had facilitated manifestly dangerous transactions without reservation, this would constitute a breach of its advisory obligation.
Breach of the Duty of Vigilance in the Event of Anomaly
Although the banker is a mere account holder subject to the duty of non-interference, it is bound by a contractual duty of vigilance that yields when transactions present material or intellectual anomalies. The bank would be liable if the wire transfers were tainted by a formal or material anomaly (such as a transaction inconsistent with the client’s wishes or unauthorized). Furthermore, if the bank had knowledge of the fraudulent nature of the beneficiary platforms (for example, if the websites were already on an AMF blacklist at the date of the disputed transfers), it would have breached its duty of vigilance by executing the orders without interference or verification.
