In a recently published decision, the Federal Criminal Court set out in greater detail the requirements for an abuse of trust pursuant to Section 266(1) of the Criminal Code (embezzlement and abuse of trust) by members of a management board of a stock corporation (Federal Criminal Court, October 12 2016, 5 StR 134/15).
The Federal Criminal Court set aside the acquittal by a district court of several members of the management board of a financial institution in connection with the approval of certain complex financial transactions. In particular, the Federal Criminal Court clarified the relationship between a violation of duties of members of management boards pursuant to stock corporation law and the requirements for a criminal breach of trust.
In a first step, the district court had been of the opinion that members of the management board had violated their duties under Section 93(1) of the Stock Corporation Act as they had not possessed adequate information when making their decision and had been aware of the information deficit. In particular, the court found that the managers could therefore not benefit from the safe haven of the business judgement rule under the Stock Corporation Act. This safe haven requires, among other things, that managers make decisions on the basis of adequate information.
Nevertheless, in a second step, the court did not hold the managers criminally liable for an abuse of trust under Section 266(1) of the Criminal Code, as the managers had committed no obvious or serious violations of their duties.
The Federal Criminal Court stated that there is no room for such a two-step approach. Pursuant to this, any violation of Section 93(1) of the Stock Corporation Act always implies a serious or obvious violation of a manager's duties, as a violation of such duties would require, among other things, that the board members had been willing to accept entrepreneurial risks to a fully unjustifiable extent. Therefore, under Section 93(1) of the act, the court held that should the utter limits of a business judgement be crossed and constitute a violation of the managers' core duties to the respective company, such a violation should be held to be so severe that it almost automatically constitutes a violation of duties under Section 266 of the Criminal Code.
The Federal Criminal Court further took the view that the question of whether the managers had been provided with adequate information cannot be decided by taking an objective view. The decisive question is whether a manager (as a prudent businessperson) could reasonably perceive that they were acting on the grounds of adequate information, thereby considering the individual peculiarities of the specific subject of their decision.
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