Intermediary and sales coaching for closed investments: BaFin prospectus up-to-dateness and prospectus liability of insurance companies

*by Johannes Fiala, Lawyer (Munich), MBA Financial Services (Univ.Wales), MM (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Lecturer (Univ. of Cooperative Education), Banker (
He who knows nothing must believe everything.” (Marie von Ebner-Eschenbach)
For the financial service provider, the BGH stipulated in its ruling of 13.01.2000 (Ref. III ZR 62/99) that investment offers must be checked for economic plausibility. Without legal and tax knowledge this is factually inconceivable. Rating agencies and insurance companies can also be held liable for prospectus or expert liability in connection with closed investments due to ignorance of rating or distribution law.
What do “BaFin-approved” products mean? products? The BaFin’s review of the prospectus is limited to formalities. Unfortunately, it is often a hard fallacy when intermediaries believe that a BaFin approval means that the financial service provider no longer has an auditing obligation.
The sometimes bad awakening comes according to VSH expert Ralf W. Barth in the case of loss, if the mediators are accused by lawyer of an insufficient folder examination. This can even jeopardize VSH protection, because even particularly grossly negligent actions can be excluded in VSH policies. In addition: Possible supplements to prospectuses are no longer examined by BaFin at all. The financial service provider cannot even rely on the fact that the current prospectus of a closed investment has been examined by BaFin ? it could be an afterthought.
Current BaFin information to epn: If you ask BaFin, you will receive the following answer: The XY fund is a closed-end fund. The Asset Investment Sales Prospectus Act (VermVerkProspG) is relevant in this respect. Supplements are only subject to a publication requirement and do not need to be reviewed or approved by BaFin. Section 11 VermVerkProspG stipulates that the offeror must publish a supplement if changes have occurred since the prospectus was permitted to be published that are of material importance for the assessment of the issuer or the investment. The law does not provide for an examination of the supplement by BaFin; in particular, § 11 excludes the application of § 8i para. 2 explicitly from. Accordingly, the supplement is not included in the BaFin database. Full publication is not provided for by law.
Complaint-free prospectus appraisal: The ?analysis 3/2006? of the Rating agency ?G.U.B.? of 07.02.2006 judged the ?Fidura fortune formation and protection fund? with ?good ++? The Heinz Gerlach media AG had referred in the expenditure ?direct investor protection No. 33B/06 of 18.08.2006? to ?high, not prospektierte Kick back payments? of insurance companies. Whether also in the folder expert’s assessment the realization from the house Gerlach stood?
The objections from the house Gerlach contain in the core the suspicion criminally relevant reproaches ? finally it concerns an issue volume of 100 million and ?Kick back ?- payments (commissions) from the use of investor funds for life insurances.
Does the property damage liability apply to the intermediary? Again and again, concepts came onto the market, where money of investors could or should be invested into insurance policies. Courts will reproach concerned financial service providers that simplest considerations would have led to the question, why the ?usual? commissions for the investment in life insurances by the initiator were not included in the prospectus. Commission for the plant into life insurances by the initiator were not prospektiert with the source of funds?
However, this breach of duty would not be really unpleasant yet. Decisively it depends on the question whether the suspicion of possibly punishable behavior (in the sense of for example ?fraud, capital investment fraud, embezzlement?) addressed by Heinz Gerlach direct investor protection is confirmed after an examination by the justice.
This is because if a criminal offence has been committed, this can be assessed as aiding and abetting or complicity on the part of the financial services provider: In that case, the own pecuniary loss liability insurer (VSH) will not grant any coverage. The financial service provider is left sitting on his “damage”. The greater the success beforehand, the greater the risk of endangering one’s own existence.
If the financial service provider/intermediary himself is later convicted of a property offence, he cannot simply get rid of the liability debts by way of private insolvency.
According to Ralf W. Barth, this shows how important it is to make provisions in one’s own interest and to put the concepts and products of the various providers through their paces. Information of respectable industry sheets can be just as significant, as the realizations from critical investor protection view and the expert transparency Rating.
Whoever advertises with positive ratings (which are usually provided by the provider) in the sale, should also appreciate the other press releases about the provider. In times of the Internet also the often heard excuse falls away: ?I could not know that, I do not refer? For the active VSH protection also the less or not positive reports must be made available to the prospective customer before conclusion. Even if these arise only months or years later.
Prospectus liability of insurance companies: The situation is no different for credit institutions and insurance companies if they have their own VSH insurance in connection with closed investments. There, too, there is no coverage for crimes under the VSH terms.
While banks in the 80’s and 90’s have already learned by ?expensive? Judgments have learned that the use of their company logo can lead to a prospectus liability, this has obviously not yet got around with some employees in sales. Pioneers of an advertisement with foreign Firmen-Logo�s are however not the insurance companies, but often lower levels in more or less uncontrolled selling structures. An example are some self-knitted leverage business brochures ? rarely with the blessing of the insurer concerned.
If, for example, sales and insurance companies watch for months or years as their name and logo are used by an initiator in ?brochures?, they need not be surprised later if investors also register their claims there. In case of doubt, the investor will want to stick straight to the insurance company, because there the creditworthiness is likely to be better than with the simple intermediary.
What is prospectus liability in the narrow sense? Prospectus in the sense of the prospectus liability is not only the sales prospectus, but for example also ?sample calculations? with the software of the initiator and/or selling, as well as advertising flyers and similar sales aids. If a person or company can be named there, the legal appearance is set that it concerns a ?co-initiator? Shortened said, it concerns thus a kind of advertising adhesion for the folder contents.
Usually, these claims from prospectus liability (in the narrow sense) become time-barred within 6 months after the investor became aware of the damage and the damaging party, but at the latest after 3 years. With the mediator one speaks of the folder adhesion in the broader sense: There the Verjährung is substantially longer, with 3 years since knowledge and at the longest 10 years.
Tip: In general, knowledge of the trade press and links to reputable professional associations are just as important as contact with a ‘real’ insurance broker and colleagues for an exchange of experience. insurance broker and to colleagues for an exchange of experiences. Professional life in sales is often too short to be able to make all negative experiences yourself.
Regarding the BGH ruling of 13.01.2000, Az. III ZR 62/99: click here To the issue Direct Investor Protection No. 33B/06 of 18.08.2006: click here

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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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