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Executives’ Liability for Incorrect Ad Hoc Announcements – A Comment on the Decision of the German Federal Court of Justice (BGH) in In re Infomatec AG, BGH II ZR 217/03, 218/03 and 402/02 of 19 July 2004

Published online by Cambridge University Press:  06 March 2019

Dirk Reidenbach

Extract

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From March 1997 until 5 June 2003, the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse, FWB) maintained the “Neuer Markt“ as a segment of the over-the-counter-market for new economy/technology companies. The 50 “biggest” companies were admitted to the Neuer Markt Index (NEMAX50®) of Deutsche Börse AG, which is now only formally being continued, after termination of the Neuer Markt, until the end of 2004, and is already succeeded by the smaller TecDAX30®. Initially a success after rising some 500% from March 1997 to mid 2000, the Index dropped from over 9000 points to below 1000 points in March 2002, a loss of 90% or 200 billion Euros. The reasons for this development are manifold and not primarily to be found in the illegal behavior of the issuers or their officials. Still, legal proceedings concerning companies like Meta@box, EM.TV, Comroad, Biodata and Refugium uncovered that in many cases wrongful acts did occur, especially in the form of incorrect balance sheets and wrong or even fraudulent communication to the market. The three parallel cases the German Federal Court of Justice (Bundesgerichtshof, BGH) had to consider, concerned one of these failing – and now insolvent -companies, Infomatec AG. In criminal proceedings the two executives (CEO and his deputy) of this company against whom the civil lawsuits had been filed, were convicted of insider trading and market manipulation. One criminal case is still on appeal. The findings of the criminal proceedings, however, were not relevant to the civil proceedings.

Type
Private Law
Information
German Law Journal , Volume 5 , Issue 9 , 01 September 2004 , pp. 1081 - 1093
Copyright
Copyright © 2004 by German Law Journal GbR 

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