French stock exchange watchdog under fire after KPMG ruling

The review follows a ruling from the French Court of Appeal which claimed the COB could not act as both judge and jury when hearing a complaint against KPMG.

The judgement has prompted the COB to suspend all its hearings, including many against other Big Five firms, and set about examining its procedures.A spokesman for KPMG in Paris said: ‘Our satisfaction is that our point of view was understood in the judgement.’

The case dates from 1996 when shareholders in a furniture maker, Dapta Mallinjoud, complained KPMG should have spotted alleged irregularities in the company’s accounts before it went through a bond issue.

KPMG claims it discovered the problems three days after the issue and could have done nothing to stop it.

A complaint against the firm was upheld by the COB which imposed a £50,000 fine.

But KPMG took the case to the Court of Appeal where the judge rejected the decision of the COB saying it could not be ‘impartial’ because under the European convention its rights to a fair trial had not be maintained.

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