When an investment company became insolvent after its license was revoked, thousands of investors lost millions of euros in 2016, which they had invested in savings plans for the purchase of precious metals. An Austrian investor then sued a Swiss notary who had confirmed the existence of the company’s gold reserves.
The aforementioned notary was commissioned by the investment company to draw up audit reports on the matching of actual and target holdings of precious metals. He did this in the knowledge that these would be used to attract new customers . With reference to the review of warehouse deposit statements, customer lists and contract data, he established their supposed completeness. A physical inspection by the notary was never planned and was also not carried out.
The plaintiff concluded contracts for the purchase and safekeeping of gold with the company in reliance on the accuracy of these expert opinions. However, since the falsely confirmed actual holding was only a debit holding, the plaintiff lost all the money he had invested.
The first and second courts upheld the investor’s claim. The Supreme Court confirmed their legal opinion:
General civil law prospectus liability claims exist if an investor is persuaded to subscribe to an investment by misleading information in the prospectus. All persons who create a special – additional – trust through their externally visible involvement in the design of the prospectus are responsible for the factual accuracy and completeness of the information. In this case, the notary assumes a guarantor position as a “professional expert”. In view of this, he has a special duty of care with regard to his audit reports. The confirmation of the correspondence between the actual and target stock of gold inventories without an actual check constitutes a gross breach of due diligence, especially as the defendant was aware of the misleading nature . The incorrect impression was created that the precious metals were actually (physically) controlled and thus a special security of the investment was suggested.
The notary is therefore liable for the resulting loss suffered by investors who made investments in reliance on the accuracy of the audit report.
Source: Supreme Court, 24.01.2019, 6 Ob 233/18k