Criminal Liability in Securities Law

After the serious financial crises of recent years, calls have increased to punish supposed management mistakes with criminal penalties. Regulators and investigators feel themselves increasingly called upon to judge business decisions in hindsight.

The dramatic consequences of the crisis led German lawmakers to increase regulation of the financial services sector and to attach criminal penalties to violations of the Commercial Paper Trading Law and the Law on the Credit Industry. Even before these latest revisions, a number of so-called banking scandals led to extreme expansion of criminal liability for breach of trust (§ 266 Penal Code) and to previously unimaginable risks for managers and executives. Suspected violations are pursued with great vigor by oversight agencies, in particular the Federal Financial Supervisory Authority. Major trials and their attendant publicity have only led to convictions in rare cases, but often inflict irreparable reputational damage.

Advising and defending clients in this area requires specific knowledge of the legal context, as well as relevant experience. This is especially true when it comes to complex and large-scale proceedings. Several lawyers in our firm were involved advising and defending those charged criminally in the so-called Berlin Banking Scandal. During this litigation – some aspects of which lasted over a decade – they became familiar with all aspects of this special field.