Who are we?ARGE-Phoenix is the result of a cooperation between law firms NIEDING + BARTH Rechtsanwaltsaktiengesellschaft and TILP Rechtsanwälte. Both law firms have been specialising in protecting the rights of investors for more than 10 years and are among the market leaders in capital investment law and in representing aggrieved investors. With our cooperation we aim to create a unit of some considerable size, which no other law firm practising in the same field has been able to achieve. Thus we can place the necessary emphasis on solving the problems at hand. What do we want? Through our cooperation we intend to represent your interests to our best ability, just as we represent those of other victims of Phoenix Kapitaldienst GmbH. We are not soliciting your business simply because we are the most cost-effective solution for you but also because we believe we can provide you with an optimal service. Beware! Avoid dubious groups, which claim to “pool your interests”, “victim associations”, “investor protection groups” or similar. There are no such things as “collective litigations” in Germany. We recommend you place your trust in law firms, which can provide you with evidence of their litigation success rate in capital investment law related cases. What happened? This has constituted one of the largest cases of fraud in the German capital market in the last decade: On 11 March 2005 the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) acknowledged that third party claims for compensation may be filed in connection with this case. This by no means implies that aggrieved investors will receive compensation, but is merely a formal confirmation that claims may be registered with the Compensatory Fund of Securities Trading Companies (Entschädigungseinrichtung für Wertpapierhandelsunternehmen (EdW)). Following contradictory media reports, EdW has now responded to our public intervention and admitted that it will investigate each individually registered claim and decide whether or not compensation will be granted. It does not therefore follow that the BaFin’s “acknowledgement of a case for compensation” will lead to “payment of compensation by the EdW”, as was initially incorrectly reported in the press.
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On 1 July 2005 the Local Court in Frankfurt a.M. opened the insolvency proceedings. Attorney Frank Schmitt was appointed as the insolvency administrator. Claims may be filed by aggrieved investors with the insolvency administrator until 15 September 2005. The creditors’ meeting will take place on 5 October 2005 in Frankfurt.
The Public Prosecutor in Frankfurt a.M. has already initiated its investigations into Phoenix Kapitaldienst GmbH and its associates. Rough estimates suggest that damages could amount to 800 million Euros. Two arrests were carried out on senior management of Phoneix Kapitaldienst GmbH. They are accused of fraudulent dealings in several thousand different cases.
From whom will you receive your compensation?
The Phoenix case is a complex and confusing state of affairs for the investors affected.
1. Compensatory Fund of Securities Trading Companies (EdW)
It is uncertain whether claims filed with the EdW will be successful. The acknowledgement from the BaFin that a case for compensation exists does not provide a guarantee that payment claims may be enforced against the EdW, but is merely a formal opening of proceedings in which each individual case will be examined by the EdW, which will then decide whether compensation is justified, see BGH (Federal Court of Justice) decision from 07.12.2004, XI ZR 361/03.
In addition there is the complex matter of the various accounts held and the currencies held in them. Pursuant to Section 4, para 1, 2nd sentence of the Deposit Insurance and Investor Compensation Act (Einlagernsicherungs- und Anlegerentschädigungsgesetz (ESAEG)), a claim for compensation exists only if funds are denominated in a currency of a European Union member state or in Euros.
Furthermore, another problem arises if “deposits” and/or “securities transactions” as defined in Section 1, para 2, 4 ESAEG turn out to be fictitious. It also has to be established that Phoenix Kapitaldienst GmbH was not functioning as a deposit business under the terms of Section 1, para 3, d) of the laws on the credit system (Kreditwesengesetz (KWG)). In this event, the EdW could not be rendered liable vis-à-vis “deposits”.
2. Federal Financial Supervisory Authority (BaFin)/Preliminary Investigation by the Public Prosecutor
With regard to the enforcement of investor claims, the findings of the BaFin and above all the public prosecutor may be of considerable importance. Thus it is imperative to maintain a constant exchange of information with these authorities.
3. Phoenix Kapitaldienst GmbH
Initial considerations are to file claims for compensation against Phoenix Kapitaldienst GmbH itself. Furthermore, we would also consider filing claims on behalf of investors against existing insurance companies. Finally, we are representing investor claims against the insolvency administrator in the pending insolvency proceedings.
4. Responsible associated parties involved in Phoenix Kapitaldienst GmbH
Potential parties against whom claims may be asserted include official bodies associated with the company, employees as well as company backers.
5. Chartered Accountants working with Phoenix Kapitaldienst GmbH
It will be necessary to investigate the extent of liability of the company’s accountants, in particular the individuals concerned.
6. Investment Brokers
Potential parties against whom claims may be asserted also include investment brokers. In order to be successful, the burden of proof would be upon the investor, to provide evidence of incorrect counsel and/or information. With mass proceedings of this nature, the issue often arises with regard to the limitations of the commercial operating effectiveness of the broker (key word: what use is a title if the opposition is bankrupt?).
Any claims against brokers/consultants in financial services are usually subject to a brief limitation of action pursuant to Section 37a Securities Trade Act (WpHG). For more information please read our notes on the subject.
At this stage we would like to draw your attention to the fact that we will refrain from getting involved in any litigations against the financial services companies and their brokers listed below, as we are cooperating with these companies to provide an optimal legal service for their clients:
ProIndex GmbH
INNOFINANZ GmbH
SIB Spar- & Investment-Beratungs GmbH
wallstreet:online Trading GmbH
Hedgefonds24.de e.K.
These financial services companies, which, combined, have more than 10,000 customers, and which are also Phoenix victims, have recommended their clients to mandate ARGE-Phoenix to represent their legal interests. The basis for this decision was the fusion of many years of experience of the law firms comprising the ARGE-Phoenix. The objective is to create a representation of interests to confront at eye-level the international specialist law firm mandated by the EdW, White & Case.
We are confident that by cooperating with the above companies, from which we have heard only positive reporting in the relevant specialist market sectors, we will not only optimally serve the interests of the Phoenix victims but also those of the regular clientele of these companies.
7. Man Financial/Man Group
What is needed here is an investigation into the violation of independent obligations on the part of the broker to provide information to the investor. It will also be necessary to investigate whether the broker or the broker’s employees were involved in any tortious incidents. Most importantly it will be imperative to carry out an intensive examination into the extent of the liability of the parties against whom claims may be asserted based on their commercial operating effectiveness, e.g. brokers. It should be noted that in the case of Man Financial, an English broker, we shall also have to take into account the legal issues thrown up by the fact that we are dealing w cross-border parties.
We want to protect your interests
Our intention is to provide you with the best representation for your particular case. We cannot promise to retrieve your full investment. However, based on the numerous years of experience of our whole team, you can rest assured that our mutual aim is to get back as much of your money as possible, to fight with all the resources we have and to provide you with our best possible service.