According to press reports, some sixty retail investors are suing Barclays in Frankfurt over certificates issued by Barclays that related to Helmut Kiener’s Ponzi scheme. Similar actions are being brought in Munich. If I am not mistaken, then this is the first large-scale litigation where the German plaintiff bar tries to establish a model procedure under the extended scope of the revised Capital Market Investors’ Model Proceedings Act (KapMuG) that came into force in November 2012 – or perhaps even the first one overall.
Kiener hat operated (from my hometown, Aschaffenburg, as it happens) a group of hedge funds that allegedly had returned 844% over a period of 13 years. When he was arrested in October 2009, the funds turned out to be Ponzi schemes through which some EUR 650 million have disappeared. One of the funds was called X1 Fund Allocation, and Barclays did issue an instrument called X1 Global Index Zertifikat, based on that fund.
Whereas previously, KapMuG covered actions against those who provided false of misleading capital market-related information, it can now be applied where such information has been used in the sale and distribution of financial products. It appears that the KapMuG application against Barclays is being made on that basis.