Facts
In 1960, X AG as the fund management company and a trust company as the trustee founded a real estate and securities investment fund. On February 1, 1967, the date of the entry into force of the Federal Act on Investment Funds, the two companies registered with the Swiss Federal Banking Commission to obtain the permit to continue their business.
Shortly thereafter, the two companies decided to dissolve the investment fund. In the spring of 1969, X AG filed a criminal complaint against its director C. for misappropriation and other misconduct. C. was subsequently dismissed from the board of directors by the general meeting of X AG.
By order dated September 26, 1969, the Swiss Federal Banking Commission revoked the business permit of X AG and appointed an administrator for the investment fund in liquidation. Furthermore, it obliged X AG to secure the amount of CHF 3,500,000 for the investors' claims.
Considerations
The Federal Supreme Court states that according to Article 44 paragraph 1 of the Federal Act on Investment Funds, the supervisory authority must revoke the business permit of the fund management company that grossly violates its statutory or contractual duties. In the present case, director C. had granted loans for personal purposes to an architect from the assets of the investment fund, falsely presented these payments as construction advances, and subsequently misappropriated millions to the detriment of the fund. Thus, he had grossly violated his duties as director and board member.
The chairman of the board of directors, B., had also grossly violated his duties by failing to inform…