J. Safra Sarasin is being ordered to cough up restitution in Germany. The Brazilian-Swiss private bank has lost a high-profile court case linked to «drugstore king» Erwin Mueller.
A district court in Ulm, German ordered J. Safra Sarasin to pay 45 million euros in damages in a court case involving Erwin Mueller, an 84-year-old German businessman who grew wealthy through the eponymous drugstore chain, newswire «AWP» reported on Monday.
Meuller had demanded restitution from the bank for being poorly advised on high-risk funds. The bank, which had rejected the accusations, has a month to appeal the verdict.
The secretive Brazilian-Swiss private bank is also being ordered to cover the costs of the lengthy court case: a judge ruled that Mueller had proven that he was the victim of flawed investment advice.
Maschmeyer's Losses
J. Safra Sarasin had raised the ire of prosecutors with questionable tax-savings products called cum-ex funds. The funds were designed to return a multiple of withholding tax on capital. German officials eventually closed the tax loophole which the products had exploited, leaving the funds worthless and its clients sitting on losses.
Besides Mueller, former Swiss Life board member and AWD founder Carsten Maschmeyer and his wife, actress Veronica Ferres, and football trainer Mirko Slomka invested in the products. The group also sued, but eventually settled their dispute out of court. J. Safra Sarasin is still haggling with German meat baron Clemens Toennies in a similar suit.
Pulled the Plug
Another plaintiff, a Munich-based entrepreneur, is also seeking restitution from Safra Sarasin – demands which will are likely to get a boost from the favorable ruling for Mueller.
Safra Sarasin recently pulled the plug on its business with wealthy Germans: the bank pulled out of the German market earlier this year after failing to reach a sustainable profit. It managed roughly 1.5 billion Swiss francs in Germany, and employed 80 people.
