SECURITIES ENFORCEMENT

CD: What major trends and developments are currently shaping securities enforcement? How challenging is the environment for companies to navigate?

Hanfland: The German securities regulator Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) has undergone fundamental reform in recent years. After the Wirecard scandal, in which approximately €2bn in cash turned out to be missing and led to the insolvency of the DAX company Wirecard AG in 2020, BaFin was harshly criticised for a perceived lack of efficient supervision. In response, BaFin’s competencies have been substantially extended by the German legislator, its workforce has been ramped up and internal structures revised under the leadership of Mark Branson, the new president of BaFin. Consequently, BaFin has significantly increased its enforcement activities. While this affects mainly other areas of financial regulation, in particular anti-money laundering, securities enforcement has followed this trend. For example, even minor delays in notifying BaFin about the acquisition of voting rights will be investigated and are likely to lead to harsher penalties. In the overwhelming majority of cases where BaFin identifies an infringement of securities laws, the matter will be forwarded to BaFin’s enforcement division and fines will be imposed. This creates a very challenging environment for companies, and requires, more than ever, close cooperation between companies’ internal and external counsel and BaFin.

Schubert: There has been a clear and intentional shift by the securities regulators away from some of the more aggressive ‘technical’ violations that we saw under the prior regime – most obviously, the off-platform communications investigations in the financial services (FS) industry. However, securities regulators have also been very clear that they intend to continue to aggressively enforce securities laws, particularly as this relates to their core mission of protecting investors from bad actors.

Apr-Jun 2026 issue

Hengeler Mueller

Katten Muchin Rosenman LLP

Wilmer Cutler Pickering Hale and Dorr LLP