German Federal Court of Justice Awards Compensation for Damages Suffered due to Incorrect Yield Forecast

An investor who was misled by incorrect information in a prospectus and as a result joined a limited partnership as a limited partner may claim compensation for the damage to confidence that occurred. He can demand either the reversal of the transaction or compensation for the loss incurred as a result of the incorrect information in the prospectus and his resulting overpayment.

This decision was taken by the Second Civil Chamber of the Federal Court of Justice on 6 February 2018, II ZR 17/17, in continuation of the judgement of 3 February 2003 – II ZR 233/01, DStR 2003, 1494.
In summary, the Federal Court of Justice tightened up the liability of investment companies for incorrect yield forecasts given to investors at the time of subscription into a fund.