When is the bank liable for faulty advice?
September 13, 2023 | 50,00 EUR | answered by Carsten Ahlert
Dear lawyer,
Several months ago, I entered into an investment with my bank after being recommended by an advisor to invest in a specific security. Unfortunately, the investment did not perform as expected and I suffered a significant loss. Now I am wondering if the bank can be held liable for faulty advice.
Before entering into the investment, I extensively discussed my investment goals, risk tolerance, and financial situation with my advisor. He assured me that the investment was suitable for me and would yield good returns. Unfortunately, the opposite has occurred and I am now facing a substantial financial loss.
I am concerned that I have lost my money due to the faulty advice from my bank advisor. I am wondering if the bank can be held liable for the damages incurred in this case, and what legal steps I can take to recover my money.
Could you please explain to me under what conditions a bank is liable for faulty advice and how I can assert my rights? Are there possibly out-of-court solutions to limit the damage?
Thank you in advance for your assistance.
Sincerely,
Andreas Bacigalupo
Dear Mr. Bacigalupo,
Thank you for your inquiry regarding a faulty investment advice from your bank. I am sorry to hear that you have suffered a significant financial loss and are now concerned about your invested money. I would be happy to explain the legal options available to you in such a situation.
Generally, a bank is liable for faulty investment advice if the advice does not meet legal requirements. These requirements are regulated in the Securities Trading Act (WpHG) and the Civil Code (BGB). The bank is obligated to provide a detailed and individual consultation before concluding an investment. This includes assessing your investment goals, risk tolerance, and financial situation. If the advice does not meet these requirements and you suffer a financial loss as a result, the bank can be held liable.
To assert your claims, you should first gather all documents and communication with your bank advisor. This includes written documents about the investment and advice, as well as emails or conversation notes. With these documents, you can prove that the advice was faulty and that you suffered a financial loss as a result.
There are various ways to limit your damage and recover your money. You can initially contact the bank and try to find an out-of-court solution. This could involve unwinding the investment or receiving compensation. If the bank does not comply with your demands, you can take legal action and engage a lawyer to enforce your claims in court.
In any case, I recommend that you promptly consult a specialized lawyer in banking law to assess your legal options and receive individual advice. An experienced lawyer can help you enforce your claims and limit your financial loss.
I hope this information has been helpful to you. If you have any further questions or need legal assistance, please feel free to contact me.
Best regards,
Carsten Ahlert, Attorney
