Initiatoren-Begleitung und Controlling: Lack of BaFin approval with punishment ? Reversal trap in distribution law

*by Johannes Fiala, lawyer (Munich), MBA Financial Services (Univ.Wales), MM (Univ.), certified financial and investment advisor (A.F.A.), banker (
For initiators and distributors it is of crucial importance that all necessary permits are available ? including audited prospectuses. However, there are always initiators who are badly advised or not advised at all. So it comes as it had to come: the criminal court sentences the initiator.
The ALPINA case ? a research of Heinz Gerlach, direct investor protection ( This case occupies the justice already for years, with numerous investors, who refuse to pay further to the society. Now the district court of Munich has made an example. In essence, if the initiator (to be precise, the managing directors of the general partner) can be convicted of criminal charges due to a lack of licenses or permits, then this is enough for the investor to lose his trust.
The challenge with reversal: If the investor has lost his trust, then he can challenge. The court interpreted this then as permissible cancellation without notice. The ruling states that ?ordinary business people have to play it safe?, especially if the Landeszentralbank comes forward because of (alleged) violation of the KWG.
Check clean vest ? with regard to the expert rating: it is crucial for the intermediary to make sure that all authorisations are in place for the products he sells. This is part of the investment adviser’s duty to check plausibility. In addition, the expert rating can help separate the wheat from the chaff.
Does my insurer pay in case of liability ? The mediator must be clear to me about it, what all counts to the specialized press. about negative circumstances is to be cleared up. Every investor can refer for decades to the fact that he would not have signed in knowledge of negative specialized press. If with a capital investment an entrepreneurial risk materializes, the investor can refer to ?concealing? negative press: At the end the risk carries then the mediator that the plant does not run well. Who closes the eyes before the ?Gerlach investor protection transparency rating? and/or the ?expert rating? knowingly, does not examine simplest plausibilities, does not need later to be surprised, if the own VSH insurer rejects a covering ?because of knowing obligation offence?
by the way: Anyone who distributes products without the necessary approvals can also make themselves liable to prosecution. The annual report of the BaFin as well as BaFin press releases offer a delightful selection here. If something (criminal) “sticks” to the intermediary, the VSH insurer is also happy, because then there is no VSH coverage.
What to do in the event of a claim? It is not uncommon for agents to bury their heads in the sand, even if they are insured. In doing so, they still try to talk to the customer and “straighten things out”. If a professional VSH broker is not at the client’s side right from the start, and especially if a (precautionary) damage report is made immediately, the insurer is happy. The VSH insurance company will refuse coverage if the damage is reported too late.

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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