The number of investment frauds has increased dramatically over recent yerars. I help investors who have been victim of (probable) investment fraude to recover their investments and limit their damages. I make use of all possible legal means: civil, criminal and bankruptcy proceedings as well as holding liable third parties who have assisted in the fraude (the so-called ‘facilitators’).
Position of injured investors in criminal proceedings
Victims of investment fraud have the right to press criminal charges and to be kept informed of the progress of the criminal investigations. If case the Public Prosecurtor would decide not to proceed with (further) prosecution, victims have the right to file a complaint with the Court of Appeal. The Court can then overturn the decision of the Public Prosecutor and order him to continue the prosecution. In addition, the injured person has a right of acces to and copy of the court documents in the criminal case. Such documents may also be used as evidence for his own claims. Also important is the admission s an injured party to the criminal proceedings with a claim for damages against the accused. The criminal court may award that claim for damages if the accused is convicted and, according to the criminal court, the accused would also liable by civil law standards. Finally, the Public Prosecutor can support the investor’s claim for damages by asking the court to impose a compensation measure on the defendant. Then the defendant must pay to the State an amount which is then paid to the victims. The Public Prosecutor may also seize the assets of the suspects and those of other persons to whom they have transferred unds or other properties.
Civil proceedings against the defendants
Even without a criminal conviction the accused can still be liable under civil law. Fraud, forgery and embezzlement are without a civil law tor. In addition to this there may also be a case of deception, misrespresentation or non-compliance with contractual obligations that may give rise to civil law claims for damages or rescission. Thus, also without criminal proceedings – which are usually only initiated if the fraud involves a large amount of money and/or number of injured investors – victims of securties fraud have ample civiel law means to recover their monies.
Many investment frauds eventually lead to the bankruptcy of the investment vehicle. Sometimes it may even be wise to press for bankruptcy, since the Bankruptcy Court will then appoint an independent Liquidator who has extensive legal powers to collect documents and information, rewinding adverse transactions, holding directors and senior managers of the investment vehicle personally liable and possibly also seek damages from advisers who have assisted in defrauding the invesment vehicle or its investors. A good cooperation between the investors and the Liquidator is certainly useful.
Liability of facilitators
For a fraud, the help of other organisations or persons is often required. In most cases, they will not knowingly assist in a fraud. However, in providing assistance, they may have violated a duty of care and be liable towards injured investors on that ground. The most common facilitators are banks, accountants and civil law notaries. Such parties are required by law to prevent them from becoming involved in criminal offences and to perform a client due diligence before opening an account or providing services. They should also respond to unusual transactions. In addition, an auditor may be liable for misleading financial or complaince statements. A civil law notary may be liable for damages resulting from transactions based on deeds or contracts executed before him or in case of irregular use of his third party trust account. Claims for damages against accountants and/or notaries are often combined with disciplinary proceedings. The outcome of disciplinary proceedings may also be used as evidence in a civil law procedure for damages. In exceptional cases, a facilitator may himself be subject to criminal proceedings as an accomplice. Injured investors may consider to bring criminal charges against facilitators to this effect.