BaFin Raises Suspicions of a Possible Breach of the Prospectus Requirement
On 27 October 2026, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, German Federal Financial Supervisory Authority) announced that there were reasonable grounds to suspect that Federli Informatik GmbH was publicly offering registered shares in Federli Informatik AG in Germany without having previously published the required securities prospectus. According to the authority, there are no indications that an exemption from the prospectus requirement applies.
This announcement does not constitute a final administrative or judicial decision on whether a breach has occurred. In particular, BaFin’s announcement neither establishes that there has been a final and binding conviction nor states that the shares offered are worthless or that fraud has occurred. The presumption of innocence applies until the matter has been conclusively resolved.
Requirements for a Public Offering of Securities
General Obligation to Publish a Prospectus
As a general rule, securities may be offered to the public in Germany only if a prospectus approved by BaFin has previously been published. Exemptions are available only under the conditions prescribed by law.
If securities are offered to the public without an approved prospectus and no exemption applies, this may breach the prospectus requirement under Article 3(1) of the EU Prospectus Regulation. BaFin’s announcement concerns a suspected breach of this kind in connection with registered shares in Federli Informatik AG.
Scope of BaFin’s Prospectus Review
As part of the approval procedure, BaFin reviews the securities prospectus in accordance with the applicable statutory criteria. In particular, this review considers whether:
- the prospectus contains the minimum information required by law,
- the information contained in it is presented in a comprehensible manner,
- the content is internally coherent and therefore free from contradictions.
By contrast, approval of a prospectus does not mean that BaFin has examined all information to verify its substantive accuracy. Nor does the authority assess the issuer’s trustworthiness or scrutinise the relevant investment product as part of this procedure.
Potential Liability Under the Wertpapierprospektgesetz
Liability for a Missing or Defective Prospectus
The Wertpapierprospektgesetz (WpPG, German Securities Prospectus Act) provides for various grounds of liability. Under § 14 WpPG, offerors and issuers may be held liable for unlawfully failing to publish a required prospectus.
By contrast, pursuant to §§ 9 and 10 WpPG, respectively, the persons responsible for the prospectus bear the liability prescribed by law for the accuracy and completeness of the information contained in a published securities prospectus. Liability arising from the failure to publish a prospectus must therefore be distinguished from liability for inaccurate or incomplete prospectus information.
Potential Fines
A breach of the prospectus requirement may be punishable by a fine of up to five million euros or up to three per cent of the total turnover generated in the preceding financial year. In addition, the fine may amount to up to twice the economic benefit obtained from the breach.
These statutory penalty ranges do not indicate whether a breach has actually occurred in the specific case or whether a fine will be imposed. BaFin’s announcement contains no final determination in this regard.
BaFin’s Guidance for Investors
BaFin advises that investments in securities should be made only on the basis of the required information. BaFin’s database of filed prospectuses can be used to determine whether an approved prospectus for a public offering of securities has been filed with the authority.
However, publication of an approved prospectus does not replace an assessment of an investment’s economic opportunities and risks. As BaFin expressly explains, the approval procedure includes neither a review of the substantive accuracy of all prospectus information nor an assessment of the issuer or the product.
BaFin’s Activities in the Public Interest
BaFin performs its duties and exercises its powers exclusively in the public interest pursuant to § 4(4) of the Finanzdienstleistungsaufsichtsgesetz (FinDAG, German Financial Services Supervision Act). Due to its statutory duty of confidentiality, it is generally prohibited from informing third parties about the course and outcome of administrative proceedings.
Persons who have specific information about the offerors named in the announcement may contact BaFin’s whistleblower office. The authority identifies relevant documents and information as including, in particular, contractual documents, email addresses, telephone and fax numbers of contacts, and the offeror’s bank account details.
Legal Assessment Under Capital Markets Law
A suspected public offering of securities without the required prospectus may raise questions concerning the prospectus requirement, the liability of the parties involved and potential investor claims. As BaFin has so far merely published that there are reasonable grounds for suspicion, the specific circumstances require an assessment separate from the authority’s notice of suspicion. MTR Legal Rechtsanwälte advises companies, investors and high-net-worth individuals on related matters; further information is available under legal advice on capital markets law.
