Investment fraud according to § 264a StGB (German penal code)

Law firm for criminal law in Kerpen, Cologne and Witten

Criminal law | Your criminal defense lawyer, reliable and specialized

Capital investment fraud according to § 264a StGB (German penal code)

Law firm for criminal law in Kerpen, Cologne and Witten

Lawyer for - Labor Law | Criminal Law | IT Law | Data Protection

Anyone who promises the blue sky for certain capital investments is not only liable for these promises, but also liable to prosecution. Capital investment fraud in particular is an important part of the Business Criminal LawThe offence does not depend on a realized and incurred pecuniary loss. Instead, the act of deception as such is already sufficient for the completion of the offense, which is why caution is required. Cryptocurrencies, binary options, real estate funds, snowball systems or CFD trading are today often used versions of investment fraud. 

According to media reports on criminal proceedings for investment fraud, investors in Germany are deprived of millions of euros every year. Time and again, "dubious investment companies" and intermediary companies that use tricks to fleece investors of their money are the subject of these reports. While this may be true, it is not always necessarily the case. Accused persons should therefore familiarize themselves extensively with the scope and limit of the § 264a StGB and thus take effective measures to prevent criminal liability.

Prerequisites of the capital investment fraud according to § 264a StGB

Conditions Investment fraud - § 264a StGB

Capital investment fraud is a criminal offense which, pursuant to. § 264a StGB is punishable by imprisonment of up to three years or a fine. Classic investment fraud involves deceiving an investor under false pretenses, which enables the fraudster to obtain the money invested. The standard is therefore intended not only to protect investors' assets, but also to safeguard the functioning of the capital market. 

Since the standard already intervenes in advance of an actual fraud, it is a so-called abstract endangerment offense. These frequently appear in the Business Criminal Law and are characterized by the fact that the deceptive act alone is sufficient for the completion of the offense. This means that regardless of the occurrence of a pecuniary loss, punishment is imposed solely on the basis of the committed act.

Investment fraud, investment fraud according to § 264a StGB, § 264a StGB, investment fraud stgb, economic criminal law, lawyer criminal law Kerpen, lawyer criminal law Cologne, lawyer criminal law Witten

By which statements is capital fraud according to § 264a StGB committed?

Characteristics of capital fraud according to § 264a StGB

Certain inaccuracies, incorrectness or incompleteness on the part of providers on the capital market in their advertising for investments are already sufficient for criminal liability in order to sell the investor a certain investment better and more profitable than it actually is. In particular, all circumstances are covered that have an influence on the value, risks and opportunities of the investment and are therefore suitable to mislead a reasonable investor to invest. Therefore, it is not a question of the occurrence of a pecuniary loss, but only of so-called value-creating circumstances. 

Consequently, circumstances relating to the motive, i.e., for example, to the procedure of how profits are to be generated, are not covered. However, the particularities of the specific individual case must always be taken into account and, as a rule, capital market laws and other legal provisions must be used as benchmarks.

Which reference objects are covered by the capital investment fraud?

Reference objects of capital fraud according to § 264a StGB

In principle, the scope of application of Section 264a StGB is only opened if the offense relates to capital investments. Accordingly, physical goods are not covered. The standard explicitly mentions securities, subscription rights or shares intended to grant a participation in the result of a company. In addition, the first and second paragraphs of the provision list offers to increase the deposit on such shares as well as those that an entrepreneur manages in his own name but for the account of a third party.

Classic examples of this (para. 1) are deeds used to assert a right, rights to receive benefits arising from membership of a company (e.g. a right to receive profits), and business or partnership interests in companies or funds and trust assets (para. 2).

Concrete offence of capital investment fraud according to § 264a StGB (German Criminal Code)

Offence of capital fraud according to § 264a StGB

Incorrect advantageous statements must have been made in brochures, representations or overviews, or disadvantageous facts must have been concealed, which were significant for the decision to purchase the investment or the increase. Thus, investment fraud can only be committed in a public advertisement in prospectuses, representations or overviews. 

If a provider deceives the potential investor in a personal consultation about essential characteristics of an investment, this only falls under the normal fraud offence according to § 263 StGB (German Criminal Code). This ultimately enforces the obligation of the provider on the capital market to provide comprehensive and complete information to the potential investor under criminal law. In order to avoid criminal liability, providers should therefore provide sufficient information on all circumstances that have an influence on the value, opportunities and risks of a capital investment.

In particular, prospectus liability is a separate area of capital market law. In principle, a prospectus must contain all information necessary for an assessment of the issuer and the product offered.

Other required crime modalities in investment fraud

Required modalities for capital fraud according to § 264a StGB

In addition, it is further required that the perpetrator makes use of certain means of committing the crime and is directed at a larger circle of addressees. The requirement that the perpetrator's conduct must be aimed at a larger circle of persons excludes individual deceptions, as already explained. Furthermore, the deceptive act must relate to the distribution of the investment forms or to offers to increase the deposit on such capital investments. Accordingly, a factual and temporal connection between the distribution or offer and the advertising or sales measures is required.
Investment fraud, investment fraud according to § 264a StGB, § 264a StGB, investment fraud stgb, economic criminal law, lawyer criminal law Kerpen, lawyer criminal law Cologne, lawyer criminal law Witten

Impunity for capital investment fraud

Impunity

Under certain legal conditions, it is also possible to be exempt from punishment or impunity despite having committed investment fraud. Thus, anyone who practices so-called active remorse can avoid a penalty. § Section 264a (3) of the German Criminal Code (StGB) provides that a person who voluntarily prevents performance on the basis of the act or a person who makes a serious effort to do so remains exempt from punishment.

What is a Ponzi scheme regularly associated with capital investment fraud?

Connection to pyramid schemes

The term pyramid scheme stands for an illegal business model in the field of capital investment fraud. They have pyramid-like structures, at the top of the system is the fraudster, who profits from the constantly growing number of investing investors. However, after a certain period of time, the initially functioning system falters, causing investors to lose the money they have invested.

Important measures and rules of conduct in the event of suspected investment fraud

Rules of conduct on suspicion of investment fraud

  • Remain silent on the matter and talk to law enforcement as little as possible; every word heard is documented and may be used against the defendant under certain circumstances

  • No disclosure of access data

  • No signing of documents, not even the backup protocol

  • Request a search warrant or have the grounds for imminent danger explained

  • Contact a criminal defense attorney as soon as possible to have a defense strategy developed that is appropriate for the defendant

Our advice

As a general rule, in the case of potential fraud offenses, it is advised to contact a criminal defense attorney immediately. The degree of legality can be narrow and should in any case be guided by expert legal assistance. Thus, with the help of an experienced Lawyer for criminal law For example, it is also possible to work towards a discontinuation of the proceedings before the indictment and main hearing take place.

We are here for you nationwide in the event of a police hearing or a defense against the prosecution!

Then contact us

+49 (0) 2273 - 40 68 504

info@kanzlei-baumfalk.de

Law firm for criminal law in Kerpen, Cologne and Witten

Lawyer for - Labor Law | Criminal Law | IT Law | Data Protection