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It is a never-ending story with always similar episodes. Investment law is one of the areas in which lawyers with business acumen and few scruples can quickly earn a lot of money.
High amounts in dispute,
Due to the large sums that investors invest in various investment models, for example in shares, funds or precious metals for retirement provision, numerous worthwhile, potential “advisory mandates” are just waiting to be acquired on the occasion of – actual or only alleged – investment scandals.
Assembly line work,
However, it is not only the comparatively high amount in dispute that makes this type of client attractive, but also the fact that the handling of these cases does not require individually coordinated legal work in each case due to their comparability, but can often be carried out as if on an assembly line with the help of ready-made letters and statements of claim.
and the legal protection pays.
In addition, many investors have legal expenses insurance that covers the costs of legal advice – regardless of its success.
The basic prerequisite for a lawyer’s money blessing is, of course, a case – as scandalous as possible – in which as many investors as possible would like to be advised out of court or, at best, represented in court proceedings. If such a case does not exist, the resourceful “investor protection lawyer” will do everything in his power to create one.
False allegations of fraud as client advertising
False allegations of fraud as client advertising In a recent case, an “investor protection law firm” already known to us from numerous other cases had reported in a press service DGAP on a first-instance decision of a regional court against a precious metal dealer and accused him of “fraudulent” behavior.
In the spirit of caring customer information, they did not miss the opportunity to point out that they would be happy to represent allegedly injured investors. “Free initial consultation” included.
What the law firm deliberately concealed was the not uninteresting aspect that the decision had since been corrected by the Hanseatic Higher Regional Court in no uncertain terms: there was nothing to the allegations of fraud. Understandably, the retailer did not want to put up with this disparagement, which went far beyond permissible corporate criticism.
While the providers contacted immediately removed the unlawful press releases from their portals upon request, the law firm itself was not in such a hurry to ensure that the press release disappeared from all publication sites.
Law firm must also remove false press release on third-party websites
The Hamburg Regional Court agreed with the applicant in its view that this type of reporting (client advertising) was inadmissible and unlawfully interfered with the (entrepreneur’s) personal rights of the trader. The law firm was therefore not only obliged to require the directly commissioned DGAP to delete the publication, but should also have independently checked the other publication sites and, if necessary, requested their removal.
Hamburg Regional Court issues temporary injunction
Following an unsuccessful warning, the competent chamber immediately issued the interim injunction for unlawful, disparaging advertising (LG Hamburg, Beschluss v. 28.2.2018, Az. 312 O 43/18). The law firm faces a fine of up to EUR 250,000 for non-compliance. The decision is not final. The amount in dispute was set at a moderate €24,000.00, as it was “only” an offshoot of the original notification.
Lawyer Arno Lampmann from the law firm LHR:
“Lawyers who are committed to protecting investors often fail to consider that unlawful, untrue advertising in the financial sector can cause considerable damage that is not covered by lawyers’ financial liability. It is therefore all the more gratifying that the courts take the interests of the companies concerned seriously and immediately put a stop to such unlawful measures. This is also in the interests of the unlawful advertising colleagues themselves.”
Disclosure: Our law firm represented the applicant.
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