German media fund bank loses suit
EmptyMUNICH -- A German court has ruled in favor of an investor in the VIP 4 media fund, who was suing the financial institution that was selling shares in the fund, Commerzbank, in what may be a precedent-setting case.
Munich's appellate court found that the Commerzbank pamphlet describing the fund, which helped back films such as "All the King's Men," "Perfume: The Story of a Murderer" and "Outlander," contained errors and that the fund, "after undergoing a conscientious plausibility study, should never have been recommended to investors," according to a statement released by the plaintiff's lawyer.
Commerzbank sold shares in the fund to about 8,000 investors. The lawyer for the plaintiff represents about 1,000 of them. Each would have to sue Commerzbank individually as there are no class action suits allowable under German law. The lawyer called for the court to declare a general right to damages for all of the fund's investors.
A Comerzbank spokesman said there had been "many judgments in favor" of the bank, "and now we're waiting for the highest financial court to make its decision. There have been hundreds of cases filed in relation to these funds, against other banks as well as against the fund itself and its CEO."
The spokesman said that Commerzbank was not the only bank that had recommended the VIP 4 media fund, "but we were the biggest."
A VIP spokeswoman refused to comment on the implications of the case for the fund, because her company had not been officially informed of the court's decision. VIP's former CEO, Andreas Schmid, was sentenced to six years imprisonment last month when a Munich court found him guilty of tax evasion in relation to the VIP 3 media fund.