Federal Law, Banks And Savings Banks Section XIV, Torts and Penal Provisions

Section XIV - Liability for Torts and Penal Provisions

Art. 38

1. With regard to the cantonal banks, the cantonal provisions concerning the liability for torts shall apply.

2. With regard to private bankers, the liability for torts is governed by the provisions of the Code of Obligations.

3. All other banks are subject to the provisions of Articles 39-45.


Art. 39

Whoever, on the occasion of the establishment of a bank or on the issue of shares, of authorised investment certificates, of participation certificates or of bank bonds has, in prospectuses, in circular letters or in similar documents, made or divulged untrue assertions or statements contrary to the requirements of the law, intentionally or negligently, shall be liable for the damages caused to each associate (shareholder, partners of limited liability companies, co-operative members) or bondholder.


Art. 40

Whoever co-operates in the establishment of a bank shall be liable for damages to the bank as well as to each associate or creditor:

a) if he has intentionally or negligently contributed to define incorrectly or incompletely, to conceal or to omit in the articles of establishment or in the by-laws, the paid-in capital or the assets taken over or the preferences given to individual associates or other persons or if he has in some other way disregarded the law on the occasion of the approval of such a measure;

b) if he has intentionally or negligently contributed to the entry of the name of the bank into the Register of Commerce on the basis of a certificate or document containing false statements;

c) if he has deliberately contributed to the acceptance of subscriptions from insolvent persons.


Art. 41

The persons entrusted with the management, direction, supervision and control of a bank are liable to the bank as well as to each associate, shareholder or creditor for the damage caused by the intentional or negligent violation of their duties.


Art. 42

Whoever as liquidator or commissioner of a bank intentionally or negligently violates the duties conferred on him by law or the by-laws shall be liable to the dissolved bank and the associates, shareholders and creditors for the damage caused by him in the same way as the governing bodies of the bank.


Art. 43

1. Insofar as the liability according to Articles 40-42 is concerned, if the associates, individual partners, shareholders or creditors have been prejudiced only indirectly by the damage caused to the bank, the claim for the payment of damages can be brought by the bank only.

2. The right of action conferred upon the creditors can be invoked only after bankruptcy proceedings have been instituted.

3. In bankruptcy proceedings against a bank, the claims of the associates, shareholders and creditors are to be raised first by the receiver of the bankrupt bank's estate. If the receiver waives the action, each associate, shareholder or creditor is entitled to demand the assignment of the claim. The proceeds shall be distributed according to the provisions of the Bankruptcy Act.

4. The ratification of the governing bodies' acts by the General Meeting precludes the claim of the associate or shareholder based on responsibility, only if he has given his approval to the resolution or if he has become associated after the decision was taken, and with knowledge thereof, or if he has not brought action within six months alter the decision has been approved.


Art. 44

Where several persons are liable for the same damage they are jointly liable. The judge determines the right of recourse among the parties concerned according to the degree of their fault.


Art. 45

1. Damage claims based on Articles 39 to 42 are barred by the statutes of limitation within five years to be counted from the day the injured party received knowledge of the damage and of the person liable for it; they become barred in any case, however, within 10 years to be counted from the day the damaging act was committed.

2 .Where the damage claim arises out of a criminal offence, which, according to the penal law, is submitted to a longer period of limitation, such period also applies to the civil claim.


Art. 46

1. Whoever intentionally:

a) opens a bank, operates a registered office, branch or agency of a foreign bank or appoints a permanent representative therefor without having obtained a licence from the Banking Commission;

b) fails to obtain the complementary licence prescribed for foreign controlled banks;

c) violates the conditions attached to the licence;

d) uses the term bank, banker or savings as part of their company name, their designation of business purpose or in their business advertising without permission;

e) makes misleading statements in advertising or misuses the Swiss domicile of a bank or Swiss traditional practices and institutions;

f) who accepts deposits from the public or savings deposits without being authorised to do so;

g) re-pledges pledges in violation of Article 17 or gives them as replacement;

h) makes a business transaction subject to Article 8 without previous notice to the National Bank or in disregard of its refusal or conditions;

i) furnishes wrong information to the Banking Commission, the bank auditors or the National Bank;

k) as a recognised bank auditor in the performance of the audit, grossly violates the duties assigned to him by the present Law or Implementing Ordinance; in particular, whoever makes untrue statements in the audit report or omits essential facts or fails to request pertinent information from the client or fails to report his findings to the Banking Commission;

I) fails to keep books of account properly or does not retain account books and records in conformity with the regulations;

shall be punished by a prison term not exceeding six months or a fine not exceeding SFr. 50,000.

2. If the act has been committed by negligence, the penalty shall be a fine not exceeding SFr. 30,000.


Art. 47

1. Whoever divulges a secret entrusted to him or of which he has become aware in his capacity as officer, employee, mandatory, liquidator or commissioner of a bank, as representative of the Banking Commission, officer or employee of a recognised auditing company and whoever tries to induce others to violate professional secrecy, shall be punished by imprisonment for not more than six months or by a fine of not more than SFr. 50,000.

2. If the act has been committed by negligence, the penalty shall be a fine not exceeding SFr. 30,000.

3. The violation of professional secrecy remains punishable even after termination of the official or employment relationship or the exercise of the profession.

4. Federal and cantonal regulations concerning the obligation to testify and to furnish information to a government authority shall apply.


Art. 48

Whoever undermines or jeopardises the credit standing of a bank, the National Bank or the Central Mortgage Institutions by the assertion or dissemination of falsehoods, shall, upon indictment, be punished by a prison term or a fine.


Art. 49

1. Whoever intentionally:

a) fails to draw up and publish the annual accounts or interim balance sheets in accordance with the provisions of Article 6;

b) does not order the annual accounts to be audited by recognised bank auditors or fails to have an audit performed that was prescribed by the Banking Commission;

c) disregards the obligations towards the bank auditors;

d) fails to comply with the request of the Banking Commission to re-establish proper conditions and remove [QQ] irregularities;

e) fails to submit the prescribed reports to the Banking Commission or the National Bank;

f) redeems investment trust certificates in violation of Article 12;

shall be punished by imprisonment or a fine not exceeding SFr. 20,000.

2. If the offence has been committed by negligence, the penalty shall be a fine not exceeding SFr. 10,000.


Art. 50

Whoever, despite warning and after being specifically advised of the penalties implicit in this Article, nevertheless fails to comply with a provision of this law or a related ordinance or an official order relating thereto will be fined up to SFr. 5,000.


Art. 50bis

The special dispositions of the Federal Law on Federal Penal Administration (Articles 14-18) are applicable.


Art. 51

1. The general dispositions of the Swiss Penal Code are applicable to infractions of Articles 47 - 48.

2. The general dispositions of the Federal Law on Federal Penal Administration (Articles 2-13) are applicable to infractions of Articles 46, 49, 50 and 50bis.

3. The prosecution of violations is subject to a five year period of limitation. This period of limitation may not be extended by more than one half through interruptions.


Art. 51bis

1. The prosecution and judgement of violations of Articles 47 and 48 is the duty of the cantons.

2. Violations of Articles 46, 49, 50 and 50bis shall be prosecuted and judged by the Federal Department of Finance in accordance with the Federal Law on Federal Penal Administration.

Prepared by: M. J. Wharton.

KPMG Fides unofficial translation of Swiss Federal Law - Banks And Savings Banks.
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