Market and Consumer Crimes

What Market and Consumer Crimes Are

Chapter XI of Title XIII of the Spanish Criminal Code groups the offenses relating to the market and consumers (Arts. 278 to 286). These are conducts attacking the proper functioning of the market, the free formation of prices and the rights of consumers and investors. The chapter includes the discovery and disclosure of trade secrets (Arts. 278-280), which has dedicated treatment, and a set of figures protecting confidence in the market: misleading advertising (Art. 282), falsifying the financial information of securities-issuing companies (Art. 282 bis), fraudulent invoicing (Art. 283), market manipulation (Art. 284), insider dealing (Art. 285) and unlawful access to broadcasting services (Art. 286).

These are technically demanding proceedings: the evidence rests on economic expert reports and frequently coexists with administrative files of the Spanish National Securities Market Commission (CNMV).

Misleading Advertising and Fraudulent Invoicing

Article 282 CP punishes manufacturers or traders who, in their offers or advertising of products or services, make false claims or state untrue characteristics such as to cause serious and manifest harm to consumers. The penalty is six months to one year in prison or a fine of twelve to twenty-four months. The defense focuses on distinguishing the punishable conduct from the mere advertising exaggeration tolerated in commerce, and on analyzing the real capacity of the information to cause that serious harm.

Article 283 CP punishes fraudulent invoicing: invoicing higher amounts for products or services whose cost is measured by automatic devices, by altering or manipulating them. The penalty is six months to one year in prison and a fine of six to eighteen months.

Market Manipulation (Art. 284 CP)

Article 284 CP represses various forms of market manipulation: altering the prices that should result from free competition by using violence, threat, deception or any other artifice; spreading news or rumors with false or misleading economic data; and carrying out transactions or orders that give false signals about the supply, demand or price of a financial instrument, or that secure its price at an abnormal or artificial level. The penalty is six months to six years in prison, a fine and special disqualification from intervening in the financial market for two to five years.

Insider Dealing (Art. 285 CP)

Article 285 CP punishes anyone who, directly or indirectly, carries out transactions on a financial instrument —acquisition, transfer, assignment, or cancellation or modification of orders— using inside information to which they had reserved access, or recommends its use to a third party, provided one of the circumstances set out in the provision concurs. The penalty is six months to six years in prison, a fine and special disqualification from the profession or activity for two to five years. Articles 285 bis and following provide for further modalities and aggravations. The defense requires precisely delimiting which information qualified as inside information and whether the investment decision was actually based on it.

Defense Strategy

Defense of these offenses rests on three pillars. First, economic expert evidence: reconstructing the transactions and establishing the true origin of the decisions. Second, the analysis of the causal link between the conduct and the price alteration or the benefit obtained. Third, coordination with the CNMV file, because the administrative and criminal qualifications may not coincide and the non bis in idem principle operates with nuances. In consumer crimes, the actual extent of the harm and the possibility of repairing it are also assessed.