Judgment of the Munich I Regional Court: Personal liability of former Wirecard board members for damages
On September 16, 2024 (Case No.: 5 HK O 17452/21), the Munich I Regional Court ruled in a significant civil case that former members of the management board of the insolvent payment service provider Wirecard AG are liable to shareholders for damages. The decision underscores the personal responsibility of the governing bodies of listed companies in connection with incorrect or omitted capital market disclosures, especially regarding the obligations of the management board under ad hoc publicity regulations. The legal framework and implications of the judgment are far-reaching and extend beyond the individual case.
Board Liability under Section 93 of the German Stock Corporation Act (AktG) and Capital Markets Law
The court based its decision on the breach of duty by individual board members regarding their disclosure obligations pursuant to Section 15 of the former Securities Trading Act (WpHG) (now Article 17 MAR), as well as the general duty of care under Section 93 of the German Stock Corporation Act (AktG). The failure to inform the capital market in a timely, complete, and truthful manner about significant accounting manipulations and negative economic developments was considered a serious breach of duty. In the court’s opinion, the board members had knowledge of irregularities at least since the end of April 2020, but failed to take appropriate action or notify the market.
Significance for tradability of shares and investor protection
Shareholders who acquired shares in Wirecard AG after the incriminated date were not fully informed about the actual economic situation. The court considered this to be the decisive reason for their investment decisions and thus for the losses incurred following the collapse and insolvency of the company in June 2020. This causal link is central in capital markets law: In the context of investor protection regarding defective capital market information (so-called market information offense), a direct claim for damages in the form of so-called acquisition damages may be possible.
Role of liability of governing bodies in the context of insolvency
In the insolvency proceedings of Wirecard AG, numerous claims for damages were filed by investors in the insolvency schedule. The civil liability of the former board members exists in parallel to any criminal investigations and ongoing criminal proceedings—for which the presumption of innocence continues to apply (see Art. 6(2) ECHR). The current decision explicitly concerns civil liability, regardless of any criminal conviction.
Internal and external liability of board members
For the management board of a stock corporation, there exists (1) so-called internal liability toward the company (Section 93(2) AktG), for example in cases of financial loss resulting from a breach of duty, and (2) external liability toward third parties—in this case specifically: shareholders or capital market participants, whose interests are protected within the context of specific circumstances of damage, such as under Section 826 of the German Civil Code (BGB) (intentional immoral damage). The Regional Court thus focused on direct external liability, which may have implications for comparable proceedings.
Consequences and classification
The judgment is groundbreaking and once again demonstrates the relevance of effective corporate governance and strict compliance in listed companies. The obligation to inform the capital market about price-sensitive developments immediately and accurately is fundamental to maintaining trust in the integrity of the markets. The judgment of the Munich I Regional Court also sends a signal to other members of governing bodies of listed companies that violations of capital markets disclosure requirements can have serious personal consequences.
Source and current procedural status
The decision was made following an oral hearing and is—as of 16.09.2024—not legally binding. An appeal can still be lodged against the decision. It is expressly pointed out, particularly for reasons of fairness and with regard to the presumption of innocence, that the concerned board members may challenge the judgment and that the proceedings are therefore not yet concluded. (Source: Munich I Regional Court, judgment of 16.09.2024, Case No.: 5 HK O 17452/21; see also: <a href="https://urteile.news/LG-Muenchen-I5-HK-O-1745221Wirecard-Vorstaende-zu-Schadenersatz-verurteilt~N34348″>urteile.news).
Conclusion and legal notes
The judgment highlights key issues regarding liability of governing bodies, investor protection, and capital market disclosure obligations. Given that remedies are still pending, developments are being closely monitored—especially by market participants, investors, and companies that rely on legal certainty in business transactions.
If you wish to discuss specific concerns or questions related to liability of corporate bodies, capital markets law, and investor protection, please do not hesitate to contact the lawyers at MTR Legal Rechtsanwälte, a firm with decades of experience in business law.
