Alpine Corporate Bonds mis-selling
In 2015, the Austrian Federal Chamber of Labour (BAK) filed 19 class action lawsuits against several major Austrian banks, following complaints from consumers that they misadvised them about the risks associated with investing into corporate bonds issued by the construction company Alpine.
According to the lawsuits, consumer who bought Alpine bonds were often given misleading and insufficient information about the risks associated with these financial instruments. Among other things, they were told in sales pitches at the bank that the issuer of the bond, the construction company Alpine, was “safe and secure.” However, following financial difficulties the construction firm Alpine became insolvent in 2013, rendering the bonds worthless from one day to the next. It is estimated that 10,000 investors have been affected by the insolvency of Alpine, with 1,265 injured parities (representing €28.6m worth of bonds) reporting to the consumer advice office of the Austrian Federal Chamber of Labour (BAK).
In 2021, the Austrian District Court of Linz ruled that Allgemeine Sparkasse Oberösterreich Bank-AG had given misleading advice to their clients about investments in corporate bonds by the construction company Alpine and was required to compensate the affected investors. Since 2015, the BAK filed a total of 19 class actions with the court. In long-standing and very expensive court proceedings, where costs of expert opinions alone exceeded €1m, and through extra-judicial negotiations with the banks being sued, several millions of euros in damages have thus far been fought for and won on behalf of investors. Six lawsuits are currently still pending before the court, and an end to these trials is still not in view, even after six years.