The Securities Litigation Review: Germany


i Sources of law

Civil law

Securities constitute a private law contract between the issuer and the security holder. German securities are, therefore, primarily governed by civil law, namely, the law of obligations (codified in the German Civil Code (BGB)) and – as far as equity securities are concerned – by corporate law.

Individual types of securities or specific features of their legal status can be subject to specific civil law legislation, sometimes with public law elements. For example:

  1. bonds and the rights of bondholders are dealt with in the Bonds Act;
  2. the safekeeping of securities is governed by the Safe Custody Act; and
  3. the Stock Corporation Act includes numerous provisions that apply specifically to public stock corporations (i.e., stock corporations listed on a regulated market). According to modern academic interpretation they form – together with relevant capital markets' supervisory law (see Section I.ii) – what is called the 'law of public stock companies'.2

Supervisory law

Publicly offered or traded securities, as well as issuers and intermediaries, are subject to a comprehensive set of regulations, which are supervised and enforced by the German Federal Financial Supervisory Authority (BaFin). Security-related supervisory law in Germany is deeply rooted in harmonised European legislation, which aims to create a unified European financial market. The most prominent examples are the revised Markets in Financial Instruments Directive (MiFID II)3 and the Markets in Financial Instruments Regulation (MiFIR). The MiFID II/MiFIR rules contain provisions for investor protection, in particular for the safeguarding of clients' assets, product governance and monetary and non-monetary inducements, as well as comprehensive regulation of market infrastructure (trading venues and systematic internalisers).

In addition, the updated Market Abuse Directive (MAD II)4 and the Market Abuse Regulation (MAR)5 establish a European single rulebook on market integrity. MAR regulates insider trading, market manipulation, ad hoc disclosure of insider information, over-the-counter trading and high-frequency trading. The implementation of MAD II has provided for a massive upgrade of administrative sanctions in case of deliberate or negligent offences against MAR rules.

Furthermore, the UCITS Directive6 and the Alternative Investment Fund Managers Directive (AIFMD)7 harmonise the supervisory requirements for open-end and closed-end funds, the Prospectus Regulation8 provides for rules on the drawing up and approvals of prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and the Takeover Directive9 provides for a European framework for public mandatory and takeover bids.

Since 2018, the European Commission has used a strategy to integrate sustainability considerations into its financial policy framework to mobilise finance for sustainable growth.10 As a substantial building block of this initiative, the Sustainable Finance Disclosure Regulation (SFDR)11 came into effect on 10 March 2021. The SFDR requires financial market participants to provide detailed information on their environmental, social and governance (ESG) products and the way they manage sustainability risks. In addition, and pursuant to an amendment of MiFID II, financial advisers and asset managers will have to explore any ESG preferences from their clients from August 2022.

The European Securities and Markets Authority12 covers (nearly) all areas of MiFID II, MiFIR, MAR and the UCITS Directive and the AIFMD with a comprehensive set of guidelines and a Q&A. While being formally addressed to the national competent authorities, such 'soft law' is regarded as de facto binding by market participants. In addition, BaFin issued separate FAQs on MAR and revised further parts of the Issuer Guidelines, namely Module C – 'Regulations under the Market Abuse Regulation (MAR)', in 2020.

Against this background, the following (most relevant) pieces of supervisory law relating to securities in Germany are to be construed in the light of their respective European framework legislation:

  1. the Securities Trading Act (WpHG), which includes provisions on investment services and ancillary investment services of banks, the disclosure of major shareholdings in public companies and the publication of financial reports by public companies;
  2. the Capital Investment Code (KAGB), which regulates the issuance and marketing of collective investment funds, covering both undertakings for collective investment in transferable securities (UCITS) and non-UCITS (also known as alternative investment funds);
  3. the Securities Acquisition and Takeover Act (WpÜG), which regulates the takeover and mandatory bids for the acquisition of shares in public companies;13 and
  4. the Securities Prospectus Act (WpPG), which applies to the drawing up, approval and publication of prospectuses for securities to be offered to the public or admitted to trading in a regulated market.

On 10 June 2021, the Electronic Securities Act came into force. This act introduces electronic securities and aims to modernise German securities law. Pursuant to the act, the electronic issuance of bonds (be it via blockchain or other electronic formats) instead of a paper certificate is possible. To this end, an electronic security can be issued by the issuer effecting an entry in an electronic securities register. BaFin is responsible for supervising the issuance of such electronic securities, as well as the maintenance of the respective decentralised registers.

ii Common securities claims

Apart from claims pursuing the mere fulfilment of contractual duties, such as a claim for due payment according to the final terms of a bond, most securities claims are based on wrongful capital markets disclosure or other abusive behaviour that results in securities holders suffering a loss. Except for the liability of credit rating agencies under the Credit Rating Agency Regulation (CRAR)14 (see 'Wrongful ratings', below), there is no specific written law that regulates securities claims. Accordingly, a significant amount of case law has evolved.

The following claims are the most common.

Incorrect or omitted publication of insider information


The issuers of financial instruments must inform the public as soon as possible of insider information that directly concerns them (Article 17(1) MAR). The rule addresses issuers of all kinds of financial instruments that are traded on a regulated market, as well as on multilateral trading facilities (MTFs) and organised trading facilities (OTFs). Article 7(2) and (3) MAR clarify that in the case of a protected process (such as the early resignation of a member of the board of directors, or a transaction) the intermediate steps as well as the final event may be deemed to be insider information and trigger the obligation to publish this information. This provision implements the reasoning of the European Court of Justice in the Geltl/Daimler case.15 In addition, Article 17(4) MAR refines the rules on temporary withholding of insider information by the issuer. Module C of the fifth edition of BaFin's Issuer Guidelines (see Section I.i) now contains detailed explanations and examples of the kinds of cases where intermediate steps constitute independent insider information.

Case law

Until 2002, claims for damages were based on (general) tort law and very often failed to fulfil the statutory requirements as interpreted by the courts. The leading case on this is Infomatec, in which the Federal Court of Justice (BGH) held members of the management of Infomatec AG responsible for the wilful dissemination of false information.16 The court reasoned that such wilful action was contrary to boni mores (i.e., it was immoral) and granted damages pursuant to Section 826 BGB.17 In later decisions, the BGH refined this line of argument; in EM.TV, it clarified that an issuing company is liable for the wilful actions of its managers (Section 31 BGB).18 In Comroad, however, the BGH emphasised the prerequisite of a full proof of causation between the incorrect notification and the plaintiff's decision to acquire or sell shares,19 which, in most cases, is difficult to provide.20

The special rules on liability in Sections 97 and 98 WpHG and its predecessors were introduced to facilitate claims for damages against an issuing company.21 Under Section 97 WpHG, shareholders only need to show that the company did not publish insider information without undue delay, that they acquired the shares after the information should have been published and that they still held the shares when the information came to light. The shareholder can claim the difference between the share price that was originally paid and the share price the shareholder would have paid had the information been published in time. The company is only exempt from liability if it can demonstrate and prove that its managers acted neither wilfully nor with gross negligence.22 The BGH, however, denied a similar reversal of the burden of proof if the claimant aims to retrieve the full share price that was initially paid (while concurrently offering to transfer the shares to the company); in this case, the shareholder will need to prove that he or she would not have bought the shares had the disclosure obligation not been breached.23

From an investor's point of view, one of the disadvantages of Sections 97 and 98 WpHG is their scope of application, which is limited to the issuing company. In a number of cases issuers have become insolvent when threatened with a large number of claims for damages. This is one of the reasons why investors continue to seek damages against the members of an issuer's management or other third parties such as auditors (see the Wirecard case, below)) under the general tort law provision of Section 826 BGB.

Shareholders v. Volkswagen AG and Porsche Automobil Holding SE

Volkswagen AG (VW) admitted to having used a 'defeat device' in approximately 11 million diesel cars, which helped to reduce emissions of nitrogen oxide and carbon dioxide when the cars were in testing mode.

On 22 September 2015, VW published an ad hoc notification admitting the use of a defeat device and announcing that it would set up accruals of approximately €6.5 billion. Within days of the information becoming public, the price of preferred shares in VW dropped by 40 per cent. The statements from the US Environmental Protection Agency (EPA) and VW suggest that for several years VW may have deceived authorities, investors and customers as to the actual level of pollutant emissions of some of its most promising car models. Apart from multiple lawsuits in the United States and elsewhere, a significant number of which have been settled by VW, the company is being confronted in German courts with claims by investors under the former Section 37b WpHG (since 3 January 2018, Section 97 WpHG) and Section 826 BGB, with the volume of claims filed at the Regional Court of Brunswick by more than 1,500 shareholders totalling around €9 billion in aggregate. In addition, Porsche Automobil Holding SE (Porsche), the majority shareholder of VW, is facing claims made by its own shareholders for reasons similar to those affecting VW. However, this, combined with the fact that there had been personnel integration between VW and Porsche at the management level, has triggered 'model proceedings' (see Section II.i). The Regional Court of Brunswick accepted several 'establishment objectives' applied for by plaintiffs and VW, and submitted these to the Higher Regional Court of Brunswick.24 The latter appointed a model plaintiff. Following further submissions by the parties, a series of oral hearings has been taking place since 10 September 2018.25 Similarly, model proceedings have been initiated in the cases of shareholders against Porsche, with the Regional Court of Stuttgart delivering an order with detailed reasoning regarding why it accepted certain establishment objectives while rejecting others.26 The Higher Regional Court of Stuttgart overturned the decision of the regional court in March 2019 and held that the lawsuits brought forward against Porsche were ultimately based on the same facts as those against Volkswagen itself.27 They were then to be assigned to the model proceedings at the Higher Regional Court of Brunswick. However, the BGH overturned the decision from the Higher Regional Court of Stuttgart and considered further model proceedings admissible against Porsche at the Higher Regional Court of Stuttgart.28

In May 2020, the BGH decided in a first fundamental ruling that VW has to refund the purchase price to the purchaser of a car with a defeat device. The BGH considers VW to have wilfully caused damage contra bonos mores pursuant to Sections 826 and 31 BGB.29 While VW has settled most consumer claims, it remains to be seen what impact the decision of the BGH will have on the securities litigation model proceedings against VW.

Criminal proceedings against the chairman of VW's supervisory board, Hans Dieter Pötsch, as well as against VW's group CEO, Herbert Diess, for alleged market manipulation were dropped against payment of €9 million.30 Likewise, in January 2021, criminal proceedings for alleged market manipulation against VW's former CEO, Martin Winterkorn, were dropped. Proceedings against Winterkorn for alleged fraud are ongoing.31

Investors v. Mercedes Benz Group AG (former Daimler AG)

Comparable to VW, investors claim that the former Daimler AG failed to inform investors ad hoc about a 'defeat device' in Mercedes-Benz diesel cars. After corresponding resolutions regarding the aims of the proceedings by the Regional Court of Stuttgart, the Higher Regional Court of Stuttgart appointed a model plaintiff in the model proceedings pursuant to the Capital Markets Model Case Act (KapMuG).32

Investors v. Bayer AG

In 2018, the German DAX-listed chemical company Bayer AG (Bayer) acquired the US agrochemical company Monsanto for more than €50 billion.33 Since the acquisition, Bayer has been confronted with thousands of lawsuits in the United States over the alleged carcinogenic weed killer glyphosate, followed by a sharp decrease in Bayer's share price.34

Prior to the presumed statutory limitation date of 31 December 2021, claims by investors worth around €2.2 billion were filed against Bayer with the Regional Court of Cologne.35 The investors argue that Bayer knew at the time of the announcement of the Monsanto deal in spring 2016 that Monsanto was starting to face class-action lawsuits in the United States that had prospects of success, and Bayer would, therefore, have been obliged to inform the capital market about theses economic risks related to the deal.36 In January 2022, the Regional Court of Cologne decided to publish applications for the establishment of a model case in the Federal Gazette, which is one of the first steps for such proceedings.37

Market manipulation


Article 12 MAR sets out detailed rules on market manipulation, provided that the manipulative action may influence the market price of financial instruments. The rules apply to all kinds of markets, including OTF and MTF. They extend to manipulative high-frequency trading and to the abuse of benchmarks. Article 15 MAR prohibits market manipulation, as well as attempts to engage in market manipulation.

In contrast to the treatment of deceptive ad hoc disclosure, German law does not provide for civil sanctions in cases of market manipulation. This might change with the MAR, which strongly emphasises investor protection.38

Under German tort law, the general provision to claim damages is Section 823(2) BGB, which requires the breach of a 'protective provision' by the injuring party. Consequently, courts have had to deal with the question of whether the former Section 20a WpHG, which was repealed with the introduction of Article 12 MAR, constitutes a protective provision. The BGH rejected this assertion in the IKB case, holding that the national rules primarily aim at ensuring the functioning of the markets on a macro level.39

As a result, former Section 20a WpHG only provided for supervisory actions and penal sanctions. Therefore, as was the case with incorrect disclosures of inside information until 2002, investors were restricted to claim damages against the issuer and its managers on the grounds of wilful causation of damage contra bonos mores (Sections 826, 31 BGB). Again, investors faced great difficulty in proving that these requirements were met.

Hedge funds v. Porsche (re Volkswagen)

In a takeover battle between Porsche AG (subsequently Porsche SE) and Volkswagen AG in March 2008, Porsche announced its intent to acquire 50 per cent of the shares in Volkswagen following continuous stakebuilding by Porsche since 2005. Shortly thereafter, Porsche declared that it would not acquire a stake of 75 per cent or more in Volkswagen. This announcement resulted in heavy short sales by market participants. During the following months, Porsche continued to buy shares and cash-settled equity swaps for shares in Volkswagen up to a total of 74.1 per cent. In October 2008, Porsche announced its intention to raise its holdings up to 75 per cent, which led to a sharp rise in the market price of Volkswagen shares.40 Having bet on falling prices, short sellers suffered severe losses amounting to approximately €10 billion to €15 billion.41

In August 2014, a criminal trial against former members of the Porsche management on the grounds of market abuse was admitted. The Regional Court of Stuttgart rendered a non-guilty verdict in March 2016.42

Under civil law, investors have filed claims for damages against both Porsche and Volkswagen on the grounds of information-based market manipulation and incorrect publication of inside information. Most claims have been dismissed. The Higher Regional Court of Stuttgart decided that the incorrect press releases of Porsche did not qualify as wilful causation of damage in a particularly reproachable manner, thus rejecting claims on the grounds of Sections 826 and 31 BGB.43 The Court further held that Section 20a WpHG would not provide for monetary compensation of investors. The BGH upheld this decision.44 Similarly, the Higher Regional Court of Brunswick reasoned that Sections 37b and 37c WpHG (now Sections 97 and 98 WpHG) would not apply to press releases, arguing that they do not reach the 'quality' of ad hoc notifications, and it dismissed the claims filed against Porsche.45

However, the Higher Regional Court of Celle is going forward with a model proceeding filed by aggrieved investors against Porsche and Volkswagen.46 While this proceeding has recently been delayed due to several (ultimately successful) challenges of bias by the plaintiffs directed at the presiding judge, in addition to the covid-19 pandemic, and the outcome is yet to be decided, the decisions illustrate that rulings may differ between the higher regional courts.

Wirecard AG

The fall of the German payment provider Wirecard AG (Wirecard) was expected to be the next big case in securities litigation in Germany, though this has not turned out to be correct so far. Wirecard was considered to be a pioneer of the German fintech scene and was part of the DAX from 2018 to 2021 until it filed insolvency.

Despite its success story, Wirecard was subject to allegations by the Financial Times and short sellers for several years. Wirecard was accused of being involved in accounting fraud, money laundering and other illegal activities, in particular with respect to its Asian business.47 Wirecard consistently portrayed itself as a victim of market manipulation by short sellers, which even prompted BaFin to ban short selling of Wirecard stock in February 2019. As the allegations continued, Wirecard hired KPMG to conduct an independent special audit in late 2019.48 Despite the report not being entirely clear, Wirecard succeeded in presenting the outcome of the audit, publishing it in April 202049 as a discharge. However, on 19 June 2020 Wirecard announced that its long-time auditor Ernst & Young (EY) was unable to identify sufficient evidence of bank balances in escrow accounts amounting to €1.9 billion – an amount corresponding to one-quarter of Wirecard's total assets – and refused to certify the 2019 balance sheet.50 As this was a covenant breach under financing agreements, certain lenders to Wirecard were permitted to cancel loans totalling €2 billion. Wirecard's share price dropped sharply.51 The company's former CEO Markus Braun and the former COO Jan Marsalek, who is currently a fugitive, are subject to criminal charges.

Due to Wirecard's insolvency file, securities litigation by retail and institutional investors, as well as lending banks, are primarily directed at EY.52 The claimants argue that EY breached its professional duty by auditing alleged escrow funds and failing to disclose further balance sheet manipulations at Wirecard.53 Thus, EY should be liable for having wilfully caused damage contra bonos mores pursuant to Sections 826 and 31 BGB. After liability for losses by EY had been denied in the first instance, the Higher Regional Court of Munich issued a notice to the parties that the evidence collected by the Munich Regional Court was not sufficient to deny the claim.54 According to the Higher Regional Court of Munich, it cannot be ruled out that EY may be liable, if the audit report was incorrect. In its notice, the Higher Regional Court of Munich also encouraged the Munich local court to initiate model proceedings according to the KapMuG.

There are also lawsuits against Wirecard itself55 and former management board members.56

The Wirecard case has also drawn attention to the question of whether BaFin is liable under the German principles of official liability for improper supervision. The condition for official liability is the breach of a third-party-related official duty. Pursuant to Section 4(4) of the Law on the Federal Financial Supervisory Authority, BaFin only acts in the public interest. The BGH concluded from this that there is no such third-party relevance with respect to market participants who are not direct addressees of BaFin acts or measures.57 The aim of such limitation is to prevent BaFin from taking overly rigid supervisory measures. As a consequence, BaFin will only be held liable for third parties in cases of abuse of authority. For this reason, claims against BaFin were dismissed in the first instance,58 although many more are being filed.59 The court held that there was no proof of collusion of employees of BaFin and Wirecard and that stock trades by BaFin employees did not constitute reprehensible conduct that would amount to abuse of authority.60

Takeover law-related claims


Pursuant to Section 10(1) WpÜG, a bidder must publish without undue delay its voluntary decision to submit an offer to the shareholders of the target company. Section 35(1) WpÜG provides that the same applies if a bidder obtains direct or indirect control over the target company. The law irrefutably presumes a controlling position of the bidder if it holds 30 per cent of the voting rights of the target company.61 In this case, a mandatory offer must be published.

Under Section 12 WpÜG, the shareholders of the target company are entitled to damages if they have tendered their shares on the grounds of an incorrect or incomplete offer document. In legal practice, however, case law deals with the timing of an offer because that sets the amount of the consideration.62 In this respect, debates focus on the question of how to determine whether and when a person has acquired direct or indirect control over a target company. Voting shares of third parties may be attributed to the bidder (Section 30 WpÜG), but usually the facts are not as clear as voting rights held by a subsidiary of the bidder. In the case of Schaeffler/Continental, BaFin had to deal with the difficult question of whether cash-settled equity swaps held by a minority stakeholder (Schaeffler Group) could convey direct or indirect control over the target company (Continental AG).63 The prevailing view is that they do not.64 In addition, the rules on acting in concert appear even more controversial and relevant in practice.65

Minority shareholder v. Deutsche Bank (re Postbank)

In September 2008, Deutsche Bank AG and Deutsche Post AG, the holding company of Postbank AG, signed an agreement that granted Deutsche Bank the right to acquire 29.75 per cent of the shares in Postbank, plus the right to acquire a further 18 per cent within 12 and 36 months of the acquisition of the first stake. After an amendment to the agreement in January 2009, Deutsche Bank purchased 22.9 per cent of Postbank shares and in October 2010 submitted a voluntary takeover bid to the free-float shareholders.

Since the offered purchase price was unattractive, a minority shareholder sued Deutsche Bank for a higher consideration on the assumption that Deutsche Bank should have made a takeover bid as early as October 2008 or January 2009. At both times the market price of Postbank shares was considerably higher. The plaintiff alleged that Deutsche Bank had passed the threshold of 30 per cent by acquiring the right to purchase additional shares in September 2008 or at least because of the attribution of the voting rights held by Deutsche Post, which resulted from the cooperation agreement between the two companies. In July 2014 the BGH expressed sympathy for the latter assumption.66

In addition, the BGH decided on a number of controversial legal issues. First, it granted shareholders of the target company who had tendered their shares to the bidder the right to demand an adjustment of the offered purchase price if the latter was found to be unreasonable.67 Some commentators had argued that shareholders faced with an unreasonable offer were merely entitled to damages for an incorrect or incomplete offer document pursuant to Section 12(1) WpÜG.68 By acknowledging the shareholders' right to demand an adjustment of the purchase price, the BGH rejected this view. The court further distinguished this breach of obligation by the bidder from a situation in which the bidder does not publish a mandatory offer altogether. In this situation shareholders are not entitled to damages.69 Finally, the BGH affirmed the view that the attribution of voting rights held by a third party requires that the bidder disposes of an unconditional right to acquire these shares and that the (simple) contractual right against a third party to demand the transfer of the shares does not suffice.70

The ruling of the BGH strengthens the rights of shareholders and, at the same time, provides clarity for investors and bidders.

However, in December 2020, the Higher Regional Court of Cologne rejected the claims of the plaintiff investors in both the remanded case and parallel cases and based this on the fact that the requirements for the assumption of acting in concert are not given.71

Prospectus liability


Section 9 et seq. WpPG provides a cause of action for an investor who acquires securities that are admitted to trading on a regulated market where the underlying prospectus contains incorrect or incomplete information.72 The list of persons who can be held liable for the losses that the investor has incurred is fairly broad and encompasses the issuer, persons who have assumed liability for the prospectus (e.g., the guarantor) and other persons who initiated the publication of the prospectus. If securities of an issuer domiciled outside Germany are also admitted to trading on a foreign regulated market, the investor may only establish a claim under German law if the securities were purchased on the basis of a transaction concluded in Germany or an investment service fully or partially rendered in Germany (Section 9 WpPG, Paragraph 3).

The investor is entitled to rescind the purchase contract and render the securities against reimbursement of the purchase price, provided that the purchase was concluded after publication of the prospectus and within six months of the first listing of the securities. If the investor is no longer the owner of the securities, he or she may claim the payment of the difference between the purchase price and the selling price of the securities.

A defendant cannot be held liable if they can prove that they were not aware of the incorrectness or incompleteness of the prospectus and that this ignorance was not because of gross negligence. In practice, however, it is very difficult for a defendant to provide such exonerating proof.73

Section 12 WpPG provides for further exclusions of the defendant's liability. For example, the investor will fail with its claim if the defendant can show that the investor knew that the statement in question was inaccurate or incomplete (Section 12 WpPG, Paragraph 2).

Section 306 KAGB provides for similar rules with respect to units or shares of investment funds, where the defendant is either the management company or any other person who has taken responsibility for the accuracy of the prospectus. Section 165 KAGB lists, in detail, the necessary content of such prospectuses (in the specifically important case of closed-end funds in conjunction with Section 269 KAGB).

Until July 2005, no disclosure requirements existed with regard to certain non-securitised investments, such as closed-end funds, which were most often structured as a GmbH & Co KG.74 Mainly for tax reasons, these investments were particularly popular among retail investors. As a result, it is not surprising that a lot of case law on prospectus liability involves the liability for these 'grey market' investments. In this regard,75 in general, courts tend to issue investor-friendly rulings. This has increasingly been the case, with persons held responsible for the issuance of securities or financial instruments, as well as alleviations of the burden of proof of causation and damages.76 The case law also supports the interpretation of the complex prospectus liability rules set out in Section 306 KAGB.77

Shareholders v. Deutsche Telekom AG

A well-known case of prospectus liability relates to the third initial public offering (IPO) of Deutsche Telekom AG shares in 2000. The company was formed in 1996 when the former state-owned monopoly Deutsche Bundespost was privatised. In December 2014, the BGH held that the prospectus published by Deutsche Telekom AG for its third IPO contained misleading statements on the valuation of the company's real estate assets and on certain shares held by a subsidiary.78

The model case proceedings have now likely come to an end in a court settlement dated November 2021.79 The settlement offers full compensation for the price the claimants paid.

Wrongful ratings


In recent years, investors have commenced lawsuits against credit rating agencies on the grounds that claimants allegedly relied on the accuracy of the rating when making their investment decision and the rating later turned out to be inaccurate. Such legal action has been fostered by a reform of the CRAR.80 Pursuant to Article 35a of the CRAR,81 investors have a claim for damages against a credit rating agency if the latter has intentionally or negligently committed one of the infringements listed in Annex III of the CRAR and this has affected a credit rating. Until Article 35a came into force, claims for damages had to be asserted exclusively under national civil law. Since the legal framework in Germany did not provide for specific liability rules for wrongful ratings, investors had to draw their claims from general civil law liability or compensation rules.

Investor v. rating agency

In 2018, the Higher Regional Court of Düsseldorf dealt with both the scope of Article 35a CRAR and the applicability of general civil law principles to false ratings. According to the court's judgment, Article 35a CRAR does not establish any liability of a credit rating agency towards the investor if its rating relates to the issuer of the financial instrument acquired by the investor but not to the financial instrument itself.82 Furthermore, the court held that the rating agreement made between the issuer and the rating agency in the case of an issuer rating does not establish any protective obligations towards investors who acquire a financial instrument of the rated issuer.


Cause of actionSources of claims for damagesProminent case law
Incorrect or omitted publication of insider informationSections 37b and 37c WpHG (now Sections 97 and 98 WpHG) (against the issuer) and Sections 826 and 31 BGB (against the issuer and its managers)Infomatec I–II (BGH, judgments of 19 July 2004 – II ZR 218/03 and 402/02)
EM.TV (BGH, judgment of 9 May 2005 – II ZR 287/02)

Comroad I–VIII (Comroad I: BGH, guidance order of 28 November 2005 – II ZR 80/04)

HRE (OLG Munich, order of 15 December 2014 – Kap 3/10)

Sections 826 and 31 BGB (against the issuer and its managers)Infomatec I–II (BGH, judgments of 19 July 2004 – II ZR 218/03 and 402/02)

IKB (BGH, judgment of 13 December 2011 – XI ZR 51/10)

Porsche (OLG Stuttgart, judgment of 26 March 2015 – 2 U 102/14)
Takeover law-related claimsSections 12(1), 31(1) and 39c WpÜG (against the bidder)WMF (BGH, judgment of 18 September 2006 – II ZR 137/05)

Schaeffler/Continental (BaFin, press release of 21 August 2008)

Deutsche Bank/Postbank (BGH, judgment of 29 July 2014 – II ZR 353/12)
Prospectus liabilitySection 9 ff WpPG, Section 306 KAGB and contract lawBuM (BGH, judgment of 12 July 1982 – II ZR 175/81)
Telekom (BGH, order of 21 October 2014 – XI ZB 12/12)
Wrongful ratingsArticle 35a CRAR, general civil law Higher Regional Court of Düsseldorf (judgment of 8 February 2018 – I-6 U 50/17).

Private enforcement

i Forms of action

Currently, there are no types of action in Germany comparable to class actions, as they are known in the United States. Nonetheless, in 2005 the German legislature introduced the KapMuG, which provides for a very specific form of class action (model cases) for capital markets litigation. Initially, the KapMuG was supposed to be limited until 31 October 2020, at which point its effectiveness would be evaluated. However, eventually the German legislature decided to extend the KapMuG until 31 December 2023, in particular to include learnings from the Model Declaratory Action Act (MuFKG) enacted on 1 November 2018.83 The KapMuG allows for a concentration of legal or factual issues concerning a great number of pending or future proceedings in one court, to reduce the caseload caused by mass litigation and to prevent contradictory decisions on similar issues. The scope of the KapMuG is, however, very limited; only claims for damages or for contractual performance can be pursued in these 'model proceedings' – and only if the claim can be based on wrongful capital markets information (damages) or can rely on offers according to WpÜG (performance claims). Also, these model proceedings do not abandon the rule that any injured party must litigate its own case and prove its own damages; rather, the KapMuG allows for parties that actively choose to participate in the model proceedings to receive a preliminary ruling on legal or factual questions that are of significance beyond their individual cases. Also, the German capital markets model proceedings require every potentially injured party to actively opt in to the proceedings. Only those parties who have actively chosen to participate in the model proceedings will be legally bound by the rulings and, in particular, only those parties can make use of the preliminary ruling when proceeding with their individual cases.

Whether investors make use of the model proceedings under the KapMuG or not, as the law currently stands they will always have to initiate an individual claim against an issuer before the competent regional court. The regular rules of procedure apply as provided for in the German Code of Civil Procedure (ZPO).

The MuFKG is intended to facilitate collective redress for consumers in cases of mass damages caused by large companies. The model declaratory action was introduced in the wake of the diesel scandal involving Volkswagen and other car manufacturers. In the view of the German legislature, a large number of diesel car owners hold claims against the relevant car manufacturers due to the diesel scandal. The German legislature takes the position that so far there have not been effective procedural means for those owners to successfully assert and enforce their claims in court against the diesel car manufacturers. The model declaratory action is intended to change this. Broadly speaking, the concept of the MuFKG is to entitle consumer protection associations and other 'qualified entities' to sue enterprises, seeking a model declaratory judgment on legal or factual issues relevant for a multitude of similar cases on which, if successful, individual consumers may subsequently base their individual claims against the enterprise. With regard to securities litigation, it is interesting that the new Act does not expressly exclude capital-market-related claims from its scope, so courts will have to determine whether the KapMuG and the MuFKG exclude or partly overlap each other. The prevailing opinion in German legal publications is that the scope of application of the model declaratory action also encompasses capital-market-related claims.84 Therefore, it is possible that investors (provided they qualify as consumers as required under the MuFKG) may base potential claims on both the KapMuG and the MuFKG – which might lead to competing law court judgments on an identical issuer.

On 4 December 2020, the Directive (EU) 2020/182885 on representative actions for the protection of the collective interests of consumers (the Collective Redress Directive) was published. The Directive intends to give more consumer protection and thus enable consumers to bring collective claims throughout Europe. According to Article 2, Paragraph 1, the Collective Redress Directive applies to representative actions brought against infringements by traders of the provisions of EU law referred to in Annex I, including such provisions as transposed into national law, that harm or may harm the collective interests of consumers. It applies to domestic and cross-border infringements, including where those infringements ceased before the representative action was brought or where those infringements ceased before the representative action was concluded. According to Article 4 of the Collective Redress Directive, Member States must furthermore ensure that the representative actions are brought up by qualified entities.86

With regard to the legal consequences, the Collective Redress Directive is more extensive than the German MuFKG. In contrast to the MuFKG, the Collective Redress Directive enables in Article 9, Paragraph 1 a direct remedy, such as compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid.87

The Collective Redress Directive stipulates in Article 1, Paragraph 2, sentence 1 that it does not prevent Member States from adopting or retaining in force procedural means for the protection of the collective interests of consumers at a national level. However, Member States must ensure that at least one procedural mechanism that allows qualified entities to bring representative actions for the purpose of both injunctive measures and redress measures complies with the Collective Redress Directive.88

Consequently, legal action under the KapMuG and the MuFKG will still be possible. However, since the Directive's remedies go further than the German legislature has provided for in the MuFKG, it remains to be seen how the German legislature will incorporate the Collective Redress Directive into national law. Member States must incorporate the Collective Redress Directive by 25 December 2022 and must apply those measures from 25 June 2023.89 In autumn 2021, the German conservative party lost the federal election. For the first time, the new government is composed of three parties: social democrats, liberals and the green party. In their coalition agreement, the three political parties committed to transpose the Collective Redress Directive into law as a further development of the MuFKG by extending its scope.90 As at March 2022, there is no draft legislation.

ii Procedure

Since securities constitute private law contracts between the parties, the ordinary civil courts of justice are competent to decide disputes between the parties. The procedural rules are laid down in the ZPO.

The two single most obvious differences between the ZPO and common law rules of civil procedure are the outstanding significance of written pleadings in German civil courts and the absence of discovery proceedings.

Written pleadings

The original principle of German civil procedure, according to which the essential parts of a lawsuit should be conducted orally, has been reversed over the past 100 years into proceedings that are based almost entirely on written pleadings.91

With the effective service of the statement of claim on the defendant, the action is pending. The statement of claim must comprehensively present all the relevant factual allegations on which the claim is based.92 Upon receipt of the statement of claim, the defendant is required to file its defence – normally within a period of three to five weeks – to which the plaintiff may reply. There is no limit to the number of briefs that each side may subsequently submit to the court before the first hearing. Before the hearing takes place, all relevant legal and factual aspects of the case must have been presented to the court in writing and very strict rules apply restricting any delayed presentation of facts.93 The hearing is preceded by settlement negotiations conducted by the court.94 If the court does not succeed in settling the case amicably, the settlement negotiations are immediately and automatically followed by the (main) hearing,95 which is generally a short event where the court orally presents the facts of the case and each party has an opportunity to comment on them.

The main hearing will either be followed by a judgment, which terminates the first instance, or the court might schedule an additional hearing for taking evidence, such as hearing witnesses or expert testimony before rendering its judgment. Judgments of first instance become final and binding unless they are appealed again within one month of being rendered.

No discovery proceedings

It is a basic principle of German civil procedure that the parties enjoy wide discretion in deciding which issues and which factual allegations they choose to present to the court.96 It is in their discretion to determine their allegations and counter-allegations as well as the factual claims that they intend to prove by evidence and the type of evidence they would like to present.

The parties are obliged to tell the truth.97 Judges are under a general duty to clarify the facts and allegations and to this end may obtain information from public sources98 and may order the presentation of documents if they have been referred to by, and are in the possession of, a party to the dispute.99 However, there is nothing in German civil procedure even remotely resembling subpoena proceedings or disclosure proceedings as they are known in the US legal system. There simply exists no general duty for one party to produce all relevant material in its possession.

Consequently, as there is no obligation to disclose all the facts of a case to the court, there are (with very minor exceptions) no pretrial discovery proceedings in German law of civil procedure.100 Therefore, the parties depend on other sources of information, which may involve requests under the German Freedom of Information Act or requests to access records of criminal investigations if the case is being investigated by public authorities. Administrative courts, however, have strengthened the right and obligation of BaFin to withhold information that concerns third-party rights.101

The most significant consequence of the parties' wide discretion to determine the factual allegations and evidence to be submitted to the court is that any factual allegations that remain uncontested by the other party are deemed to constitute a true fact on which a judgment can be based without any further proof.102

iii Settlements

A key principle of German civil proceedings is that the court shall facilitate an amicable solution for a legal dispute (Section 278 ZPO). A dispute litigated in court may be settled at any time within or outside the proceedings. A settlement may, in particular, be reached by submitting a proposed settlement to the court. The court will not review the proposed settlement for adequacy or fairness of the terms. However, the court may refuse to issue an order establishing that a settlement has been reached if the settlement violates mandatory statutory law or public policy.

Special rules apply in proceedings under the KapMuG. The model plaintiff and the model defendant may conclude a settlement before the court by submitting to the court a proposed settlement of the model proceedings and of the original individual cases or by accepting a settlement proposed by the court (Section 17 KapMuG). The proposed settlement must also be submitted to any intervening party — namely, plaintiffs who have not been chosen as the model plaintiff — under parallel proceedings. Intervening parties may comment on the settlement and may reject their participation (opt out) within one month of receipt (Section 19 KapMuG). Unlike in standard civil proceedings, the proposed settlement also requires approval by the court, including the adequacy of the settlement, and takes into account the status of the model proceedings and the results of consultation with intervening parties (Section 18 KapMuG). The settlement will become valid and binding upon approval by the court, provided that less than 30 per cent of the intervening parties opt out of the settlement.

Attorneys' fees are governed by professional rules stipulated by the Lawyers' Remuneration Act. Attorneys are under an obligation to charge at least the fees stipulated by this act for representation in court cases. These fees depend on the value of the dispute. An attorney who contributes to finding a settlement that ends the dispute is entitled to an additional statutory fee.

iv Damages and remedies

Remedies for violations of securities laws, including the determination and calculation of damages, depend on the cause of action. Generally, damages for violations of securities laws shall result in a natural restitution to the extent of the negative interest. That means that the claimant is to be placed in a position that it would have been in had the relevant law not been violated. Depending on the cause of action and the current status, this may include a right of choice. For example, in the case of incorrect publication or failure to publish insider information (Sections 97 and 98 WpHG), the investor may choose either to reverse the relevant securities transaction or to claim the difference between the price actually paid and the price that would apply if the information had been duly published.103

This principle also applies to the prospectus liability. The investor may claim either reimbursement of its expenses (particularly including the capital contribution and any premium) against return of the shares and an earned interest or compensation for the reduced value of the shares plus interest resulting from the inaccurate or omitted information. The claim for damages includes indemnification against tax and other disadvantages resulting from the investment. In addition, the investor may claim for loss of profit from a missed opportunity of an alternative investment.

Damages comprise, and are limited to, the actual loss suffered (i.e., there are no punitive damages). As a general rule, the investor bears the burden of proof of the loss and of its causation by the violation. However, there are concepts that ease or even shift the burden of proof from the investor. Where it is in dispute whether a loss has occurred, and its amount, a German court shall rule at its discretion based on its evaluation of all circumstances (Section 287 ZPO). The concept of prospectus liability also includes a reversal of the burden of proof regarding the causation of the acquisition of the share or interest by the inaccurate or omitted information, which means that the defendant must prove that the investor would have acquired the shares even if it had been properly informed.

Public enforcement

i BaFin

BaFin supervises and enforces compliance with the requirements of all security-related supervisory rules (see Section I.i) and may issue orders provided that they are appropriate and necessary. For example, pursuant to Section 6(2) WpHG, BaFin may temporarily prohibit on-exchange trading of individual shares to the extent that this is necessary to enforce the prohibitions or requirements pursuant to the WpHG (e.g., market manipulation).

To this effect, BaFin may request that anyone provide information, or present documents and surrender copies, as well as summon and question people. During usual business hours, employees of BaFin must be given access to the property and business premises.

BaFin can publish decisions against companies for not complying with the provisions of the WpHG on its website , provided that such decisions are legally binding, the authority deems the publication suitable and necessary, and it would not significantly endanger the financial markets or lead to disproportionate damage to the parties involved (Sections 123 to 126 WpHG).

As a consequence of the Wirecard scandal, the Act on Strengthening Financial Market Integrity (FISG) was enacted in June 2021. BaFin now has the competence to act directly and immediately against capital market companies in the event of suspected breaches of accounting standards.104 After huge criticism for delaying the release of information to the public in prior scandals, according to Section 107(1) WpHG, BaFin has the right to publish its audit order in the Federal Gazette and on its website, stating the name of the company concerned and the reason for the order, insofar as there is a public interest in this.

ii Sanctions, prosecutor and cooperation

In the event of a deliberate or grossly negligent breach of supervisory rules, German law provides for two classes of sanctions: criminal penalties for serious breaches; and administrative fines for minor cases. The competent authority for the imposition of administrative fines is BaFin, while public prosecutors are responsible for the prosecution of criminal matters. Both authorities work closely together. With the implementation of MAD II and MiFID II, administrative fines have been increased substantially (as set out in Section 120 WpHG).

BaFin must report to the competent public prosecutor as soon as possible and present the information and facts leading to the suspicion that a criminal offence may have been committed. It may transfer the personal data of the people who are under suspicion or who could act as witnesses to the public prosecutors to the extent that this is necessary for the purposes of criminal prosecution.

In return, the public prosecutor will inform BaFin of the commencement of any investigation proceeding with respect to criminal offences. If experts are required during the investigation proceedings, employees of BaFin with the relevant knowledge can be called upon. If the public prosecutor considers discontinuing the proceedings, it is required to take the BaFin's view into consideration.

Cross-border issues

There are no specific laws in place for cross-border securities litigation; rather, the general rules for cross-border litigation apply. Generally, a non-EU foreign issuer that does not maintain a branch office in Germany can only be subjected to legal proceedings before a German court if the parties have agreed on German jurisdiction, either when entering into a contract or at any time thereafter (Section 38 ZPO). The situation is principally the same if the foreign issuer has its corporate seat in the European Union (see Article 25 of Regulation (EU) No. 1215/2012). German courts will always apply German rules of civil procedure, while the applicable substantive law is determined by conflict-of-law rules, the primary source of which in this case is Regulation (EU) No. 593/2008 (the Rome I Regulation). A choice of law made by the parties is generally recognised under these rules (Article 3 Rome I Regulation), subject to certain exceptions, such as overriding mandatory provisions (Article 9 Rome I Regulation) that may become relevant in the context of securities litigation.105

Year in review

Volkswagen (see Section I.ii) has been the most notable event in the area of securities litigation in Germany. The Higher Regional Court of Brunswick has held 12 oral hearings in 2021, but it has not yet come to a decision on the various 'establishment objectives' brought forward by both plaintiffs and defendants. Pursuant to a reference order published in November 2021,106 the court is considering taking evidence on the question as to whether the former board members of Volkswagen violated their duties intentionally or with gross negligence.

In one of the trials against participants in tax refunds known as cum-ex deals, a former banker of the private bank MM Warburg was found guilty of tax evasion after he made a confession. He is being charged with 13 counts of particularly severe tax evasion in connection with the cum-ex deals.107 A claim by MM Warburg (which executed the transactions) against Deutsche Bank for reimbursement of taxes paid following cum-ex transactions was dismissed by the Frankfurt Higher Regional Court in the second instance.108

From a regulatory perspective, changes to BaFin's competences by the FISG are most notable, as this is an effort to prevent new accounting scandals in Germany.

Outlook and conclusions

The Wirecard case is likely to attract a lot of attention this year, as law firms that focus on (retail) investors' claims continue to collect plaintiffs, and the most recent decision by the Higher Regional Court of Munich increases the prospects of EY being liable for damages. In the Monsanto case, model case proceedings are expected to start this year.

In the cases against Deutsche Telekom, after over 15 years, one of the cases (which was the reason for the KapMuG being introduced) will most likely end, with 16,000 individual claimants (or their heirs) accepting a settlement.109

More market participants (investors, asset managers, banks and custodians) are expected to try to seek recovery for trading losses, retrospective tax payments and penalties incurred in the context of cum-ex and cum-cum deals, and will sue each other before civil law courts. Depending on the contractual relationship they have with each other, such claims may be based on alleged wrongful advice, breach of contractual duties, or joint and several compensation. In February 2022, Hanno Berger, a former attorney and the 'spiritus rector' of the cum-ex deals who fled Germany in 2012, was extradited by Swiss authorities and will face trial in Wiesbaden.110

As the new German government has agreed to strengthen collective redress, Germany will slowly but steadily join other jurisdictions that are friendly to mass claims.


1 Lars Röh and Tobias de Raet are partners at lindenpartners. The authors thank Georg Schäfer, associate at lindenpartners, for his valuable contribution to this chapter.

2 Marsch-Barner and Schäfer (Handbuch börsennotierte AG (Fifth Edition, 2022) passim).

3 Directive 2014/65/EU.

4 Directive 2014/57/EU.

5 Regulation (EU) No. 596/2014.

6 Directive 2014/91/EU.

7 Directive 2011/61/EU.

8 Regulation (EU) No. 2017/1129.

9 Directive 2004/25/EU.

10 European Commission, Action Plan: Financing Sustainable Growth, COM(2018) 97 final.

11 Regulation (EU) 2019/2088.

13 In spite of its economic importance, the takeover of private companies has not been specifically regulated until now.

14 Regulation (EU) No. 1060/2009.

15 ECJ, judgment of 28 June 2012 (Case No. C-19/11); cf. also the corresponding ruling of the Federal Court of Justice (BGH), decision of 23 April 2013 (Case No. II ZB 7/09), NZG 2013, p. 708 et seq. (Geltl/Daimler AG).

16 Infomatec AG (a mobile telephone provider) had published an ad hoc notification stating that it had received an offer for purchase of the company's products with a total order volume of more than 55 million deutschmarks (approximately €30 million). In fact, the binding part of the order had a volume of only 9.8 million deutschmarks. Immediately after the ad hoc notification the share price rose by 20 per cent. For a summary of the facts, as well as the judgment, see Koch in European Capital Markets Law (Veil (ed.) 2013), Section 19, Paragraph 111 et seq.

17 BGH, judgment of 19 July 2004 (Case No. II ZR 218/03), BGHZ 160, p. 134 et seq.

18 BGH, judgment of 9 May 2005 (Case No. II ZR 287/02), NZG 2005, p. 572.

19 BGH, guidance order of 28 November 2005 (Case No. II ZR 80/04), NZG 2007, p. 345; see Koch in European Capital Markets Law (Veil (ed.) 2013), Section 19, Paragraph 114.

20 For a discussion on possible alleviations of the proof of causation, see ibid., Section 19, Paragraph 115.

21 See Zimmer and Grotheer in Kapitalmarktrechts – Kommentar (Schwark/Zimmer (ed.), Fifth Edition 2020), Sections 97 and 98 WpHG, Paragraph 1 et seq.

22 As Koch in European Capital Markets Law (Veil (ed.) 2013) points out, none of the other EU member states, with the exception of the United Kingdom, provide a special legal framework for the breach of the obligation to disclose inside information.

23 BGH, judgment of 13 December 2011, NJW 2012, p. 1800; Koch in European Capital Markets Law (Veil (ed.) 2013), Section 19, Paragraph 120.

24 Regional Court of Brunswick, decision of 5 August 2016 (Case No. 5 OH 62/16).

25 Higher Regional Court of Brunswick (Case No. 3 Kap 1/16).

26 Regional Court of Stuttgart, decision of 28 February 2017 (Case No. 22 AR 1/17 Kap). In a further decision of 6 December 2017, the court initiated separate model proceedings regarding issues of local jurisdiction (Case No. 22 AR 2/17 Kap).

27 Higher Regional Court of Stuttgart, resolution of 27 March 2019 (Case No. 20 Kap 2 – 4/17).

28 BGH, resolution of 16 June 2020 (Case No. II ZB 10/19).

29 BGH, judgment of 25 May 2020 (Case No. VI ZR 252/19).

30 See Menzel, 'Strafverfahren gegen VW-Chef Diess und Aufsichtsratschef Pötsch eingestellt', Handelsblatt, 19 May 2020.

31 See 'Marktmanipulations-Prozess gegen Ex-VW-Chef Winterkorn geplatzt', Handelsblatt, 15 January 2021.

32 Regional Court of Stuttgart, decision of 14 January 2021 (Case No. 129 AR 1/21 Kap); Higher Regional Court of Stuttgart, resolution of 2 December 2021 (Case No. 20 Kap 1/21).

33 See 'Bayer macht den Sack zu - 66 Mrd. Dollar für Monsanto', Börsen-Zeitung, 15 September 2016.

34 See 'Neue Klage gegen Monsanto in den USA wegen Verseuchung von Gewässern', Handelsblatt, 30 May 2019.

35 See 'Forderungen gegen Bayer steigen' Süddeutsche Zeitung, 4 January 2022; 'Bayer verteidigt sich mit SZA gegen Tilp und Hausfeld', Juve, 11 January 2021.

36 See Bert Fröndhoff/VolkerVotsmeier, 'Bayer erfahren droht die nächste Klagewelle – diesmal von Investoren', Handelsblatt, 27 January 2021.

37 See Antje Kullrich 'Bayer-Aktionäre klagen auf 2,2 Mrd. Euro', Börsenzeitung, 4 January 2022.

38 Likewise see Mock in Kölner Kommentar zum WpHG (Hirte and Möllers (eds.), Second Edition, 2014), Section 20a WpHG, Paragraph 478 et seq.; and Hellgardt, AG 2012, p. 154, 163 et seq.; Beneke/Thelen, BKR 2017, p. 12.

39 BGH, judgment of 13 December 2011 (Case No. XI ZR 51/10), NJW 2012, p. 1800. On the facts and ruling of the case, see Mock, in Kölner Kommentar zum WpHG (Hirte and Möllers (eds.), Second Edition, 2014) , Section 20a WpHG, Paragraph 475; BGH, decision of 15 November 2016 (Case No. KZR 73/15), BeckRS 2016, 21465.

40 For a brief time on 28 October 2008, Volkswagen was the world's most valuable company. Financial Times (FT Alphaville), 31 October 2008, 'The day Volkswagen briefly conquered the world',

41 On the facts see Möllers, NZG 2014, pp. 361 and 362.

42 Higher Regional Court of Stuttgart, decision of 18 August 2014 (Case No. 1 Ws 68/14), ZIP 2014,
p. 1829.; Regional Court of Stuttgart, decision of 18 March 2016 (Case No. 13 KLs 159 Js 69207/09);
the judgment is final.

43 Judgment of 26 March 2015 (Case No. 2 U 102/14), BeckRS 2015, 05690; in this case hedge funds claimed damages in the amount of €1.76 billion for losses suffered as a result of short selling in 2008.

44 Decision of 15 November 2016 (Case No. KZR 73/15), BeckRS 2016, 21465.

45 Judgment of 12 January 2016 (Case No. 7 U 59/14), NJW-RR 2016, 624.

46 Decision of 5 December 2016 (Case No. 13 Kap 1/16), BeckRS 2016, 115907; becklink 2005201; cf. also Weber, NJW 2017, p. 991, 993 f.

47 See Felix Holtermann/René Bender, 'Staatsanwaltschaft stellt Ermittlungen gegen', FT; 'Journalisten zu Wirecard-Berichten ein', Handelsblatt, 3 September 2020.

48 See Felix Holtermann/Christian Schnell, 'Wirecard lässt auch die dritte Frist zur Vorlage der Sonderprüfung verstreichen', Handelsblatt, 28 April 2020.

49 See Felix Holtermann, 'BaFin zeigt Wirecard-Chefs wegen Verdachts der Marktmanipulation an – Razzia in Konzernzentrale', Handelsblatt, 5 June 2020.

50 See 'Wirecard kämpft ums Überleben - 1,9 Milliarden gelten als verloren', Börsen-Zeitung, 23 June 2020.

51 See 'Bilanzbluff führt zum Kollaps', Börsen-Zeitung, 24 June 2020.

52 See 'Anlegerschützer gehen gegen EY vor', Börsen-Zeitung, 17 July 2020; see 'Wirecard-Schadensersatz fokussiert auf EY', Börsen-Zeitung, 22 September 2020.

53 See 'Union Investment plant Klage gegen Prüfer EY', Börsen-Zeitung, 1 October 2020.

54 Higher Regional Court of Munich, written notice of 9 December 2021 (Case No. 8 U 6063/21), BeckRS 2021, 43191.

55 See 'Union Investment plant Klage gegen Prüfer EY', Börsen-Zeitung, 1 October 2020.

56 See Higher Regional Court of Munich, judgment of 11 November 2021 (Case No. 8 U 5670/21) regarding the freeze of a board member's assets.

57 BGH, resolution of 20 January 2005 (Case No. III ZR 48/01), BGHZ 162, 49, 58; BGH, judgment of 7 May 2009 (Case No. III ZR 277/08), Paragraph 26.

58 Regional Court of Frankfurt, judgments of 19 January 2022 (Cases Nos. 2-04 O 65/21, 2-04 O 531/20, 2-04 O 561/20, 2-04 O 563/20).

59 See 'Wirecard-Anleger gegen die Bafin' Frankfurter Allgemeine Zeitung, 23. February 2022.

60 Regional Court of Frankfurt, judgement of 19 January 2022 (Case No's. 2-04 O 65/21) Paragraph 43 sub..

61 See Section 29(2) WpÜG.

62 Pursuant to Section 31(1) WpÜG in conjunction with Sections 4 and 5 WpÜG-AngebotsVO (WpÜG Offer Ordinance) the consideration must be 'reasonable'.

63 On the facts, see Habersack, AG 2008, p. 817 et seq.; and Schanz, DB 2008, p. 1899 et seq.

64 BaFin, press release, 21 August 2008; Cf. Wackerbarth in Münchner Kommentar zum AktG (Goette and Habersack (eds.), Volume 6, Fourth Edition, 2017), Section 30 WpÜG, Paragraph 48; and von Bülow in Kölner Kommentar zum WpÜG (Hirte and von Bülow (eds.), Second Edition, 2010), Section 30 WpÜG, Paragraphs 127 and 173 et seq.

65 See von Bülow in Kölner Kommentar zum WpHG (Hirte and Möllers (eds.), Second Edition, 2014), Section 30 WpÜG, Paragraph 203. See also, for example, regarding the WMF case, Veil in European Capital Markets Law (Veil (ed.) 2013), Section 24, Paragraph 53 et seq.

66 See also BGH, judgment of 29 July 2014 (Case No. II ZR 353/12), NZG 2014, p. 985, Paragraph 56 et seq.; the court remanded the case to the Higher Regional Court of Cologne for further investigation of the cooperation agreement and final judgment.

67 BGH, judgment of 29 July 2014 (Case No. II ZR 353/12), NZG 2014, p. 985, Paragraph 19 et seq.

68 See, for instance, Krause in WpÜG (Assmann, Pötzsch and Schneider (eds.), Third Edition, 2020),
Section 31 WpÜG, Paragraph 166a et seq.

69 BGH, judgment of 29 July 2014 (Case No. II ZR 353/12), NZG 2014, p. 985, Paragraph 19.

70 BGH, judgment of 29 July 2014 (Case No. II ZR 353/12), NZG 2014, p. 985, Paragraph 39 et seq.

71 Higher Regional Court of Cologne, decisions of 16 December 2020 (Case No. 13 U 166/11), BeckRS 2020, 35492, Paragraph 46; (Case No. 13 U 231/17).

72 The Act is based on the European Prospectus Regulation (2017/1129).

73 See Groß, Kapitalmarktrecht (Eighth Edition, 2022), Section 9 WpPG, Paragraph 98 'probatio diabolica'.

74 This is a general partnership, with the general partner being a limited liability company. See also Zoller,
Die Haftung bei Kapitalanlagen (Second Edition, 2014), Section 5, Paragraph 4 et seq.

75 While in both cases the basis for a claim is in contract law (Sections 280(1) and 311(2)(3) BGB), the two forms of liability differ with regard to the persons held responsible and the limitation of actions. On the distinction, see Emmerich in Münchner Kommentar zum BGB (Säcker, Rixecker, Oetker and Limperg (eds.), Eighth Edition, 2019), Section 311, Paragraph 141 et seq.

76 See also Zoller, Die Haftung bei Kapitalanlagen (Second Edition, 2014), Section 5, Paragraph 20 et seq. and Section 6.

77 Likewise, see ibid., Section 6, Paragraph 9.

78 BGH, judgment of 21 October 2014 (Case No. XI ZB 12/12), NJW 2015, p. 236.

79 BGH, judgment of 21 October 2014 (Case No. XI ZB 12/12), NJW 2015, p. 236.

80 Regulation (EU) No. 1060/2009.

81 Article 35a being inserted by the 2nd Reform Regulation to the CRAR (Regulation (EU) No. 462/2013).

82 Higher Regional Court of Düsseldorf, judgment of 8 February 2018 (Case No. I-6 U 50/17).

83 See BT-Drucksache 19/20599, p. 1.

84 Lutz in ZPO (BeckOK), Section 606 ZPO, Paragraph 8.1; Rathmann, in ZPO (Saenger (ed.), Ninth Edition 2021), Section 606 Paragraph 4; Vollkommer, in ZPO (Zöller (ed.), 34th Edition, 2022), Section 606 Paragraph 2.

85 Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC, L 409/01.

86 Article 4 of Directive (EU) 2020/1828, p. L 409/13.

87 Article 9 of Directive (EU) 2020/1828, p. L 409/16.

88 Article 1 Paragraph 2 sentence 1 of Directive (EU) 2020/1828, p. L 409/12.

89 Article 24 of Directive (EU) 2020/1828, p. L 409/21; see Asmus/Waßmuth (eds.), Kollektive Rechtsdurchsetzung, KapMuG, Sections 606 to 614 ZPO und EU-Verbandsklagen-Richtlinie,
First Edition, 2022.

90 Coalition Agreement between SPD, Bündnis 90/Die Grünen and FDP, p. 106.

91 Greger in ZPO (Zöller (ed.), 34th Edition, 2022), Section 128 ZPO, Paragraph 1 et seq. and Section 129 ZPO, Paragraph 1 et seq.

92 Section 253 ZPO.

93 Section 296 et seq. ZPO.

94 Section 278(2) ZPO.

95 Section 279 ZPO.

96 Greger in ZPO (Zöller (ed.), 34nd Edition, 2022), Section 128 ZPO, Paragraph 10.

97 Section 138(1) ZPO.

98 Section 358a No. 2 ZPO.

99 Section 142 ZPO.

100 See also Higher Regional Court of Frankfurt am Main, decision of 16 May 2013 (Case No. 20 VA 4/13), BeckRS 2013, 12264.

101 VGH Kassel, judgment of 3 March 2015 (Case No. 6 A 1071/13), BeckRS 2015, 46064, relying on a decision of the ECJ dated 12 November 2014 (Case No. C-140/13); Weber, NJW 2015, p. 2307, 2308.

102 Section 138(3) ZPO.

103 BGH, judgment of 13 December 2011 – Case No. XI ZR 51/10.

104 See Draft Act on Strengthening Financial Market Integrity (FISG), p. 1, BT-Drucksache 19/26966.

105 See also Martiny in Münchner Kommentar zum BGB (Säcker, Rixecker, Oetker and Limperg (eds.), Volume 13, Eighth Edition, 2021) Article 9 Rom I-VO, Paragraph 74 et seq.

106 High District Court of Brunswick (OLG Braunschweig), Order of 11 November 2021 (Case No. 3 Kap 1/16), AG 2022, 164.

107 See Jan Willmroth/Nils Wischmeyer, 'Banker wegen Cum-Ex-Geschäften zu Haftstrafe verurteilt', Frankfurter Allgemeine Zeitung, 9 February 2022.

108 See Sönke Iversen/Volker Votsmeyer, 'M.M. Warburg scheitert mit Klage gegen die Deutsche Bank', Handelsblatt, 2 March 2022.

109 BGH, judgment of 21 October 2014 (Case No. XI ZB 12/12), NJW 2015, p. 236.

110 See Marcus Jung, 'Prozess gegen Hanno Berger könnte im April starten', Frankfurter Allgemeine Zeitung, 25 February 2022.

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