Grey capital market

Grey capital market - important information on the grey capital market

All companies that do not require a licence from BaFin and operate on the financial market without state control and supervision are active on the so-called grey capital market. If a company raises capital on the grey market, this does not automatically mean that the transactions are risky or illegal. However, some companies use certain structuring options to circumvent BaFin controls. There are various indicators that can suggest that an offer is risky. As companies operating on the grey capital market are not directly supervised, investors should be particularly careful with the products they offer.

Grey capital market - special features of products on the grey capital market

Companies that offer products on the grey capital market offer their customers the following advantages in particular:

Above-average returns
the investment is advertised as very safe
Often "ethically correct" or particularly "fair" investments are also advertised

Grey capital market - forms of investment

The investment offers on the grey capital market can be very diverse - company participations, order bonds, crowdfunding, direct investments, gold or precious metal savings plans, various forms of loans, various hybrid bond forms, savings plans for gold or other precious metals, etc.

Grey capital market - dangers for investors - information from a lawyer

Investors who are interested in investing in the grey capital market should consult an experienced lawyer in good time before investing their money in unknown investments. The following risks in particular must always be taken into account:

There is no product control on the grey capital market, so you should pay very close attention to the "small print".
As the providers are not subject to any state control, the seriousness and creditworthiness of the providers, initiators and managers must be scrutinised closely.
The extent to which a business model or investment is economically viable can only be determined after a thorough review. The statements made by consultants should always be treated with caution.
The ongoing activities of the company are also not monitored, so investors should be well informed about their rights in the event of poor corporate governance.

Grey capital market - where can you get reliable information about offers and providers?

Investors can turn to a competent lawyer who has experience in the areas of banking and capital market law and general commercial law. Important information can also be found in the prospectus for the investment offered. However, not all investments require a prospectus. A prospectus is required for the following forms of investment, for example - securities, profit participation rights and
other company shares. In addition, the prospectuses are usually very extensive, so that only very experienced and legally savvy investors can correctly categorise all the information. In particular, the information on the following points is of considerable importance - risks, securities, guarantees, investment conditions, financial figures and information on the risks of the investment, use of funds, investment strategy and commissions.

Grey capital market - BaFin's tasks

Investors should be aware that even a review of the prospectus by BaFin is not a "clearance certificate". This is because BaFin does not check whether the investment
whether the provider is reputable, reliable and solvent. The accuracy of the information and forecasts is also not checked. Instead, BaFin merely determines whether the respective prospectus contains the legally required minimum information on the provider and the product offered.

Grey capital market - no prospectus - what does that mean?

In many cases, there is no prospectus reviewed by BaFin. Particular caution is then required. Investors should obtain information about the company and the specific investment from other sources. The source of information should be reliable and neutral. Not only the advantages, but also all the risks of the investment should be presented.

Grey capital market - losses suffered?

According to calculations by the Federal Criminal Police Office, investors lose between 20 and 25 billion euros every year in transactions on the grey capital market. In many cases, fraud is also suspected. Investors who have lost money investing on the grey capital market should quickly contact an experienced lawyer. They can check the investor's claims and the various possible courses of action. In many cases, those affected are entitled to compensation. These should be enforced quickly and efficiently.

Grey capital market - checklist for investors

Is there reliable and trustworthy information about the company and its products?
When it comes to unknown and supposedly particularly new, innovative and
ethically correct products? Can the business model be verified?
Where is the company based? You should always be more careful with foreign companies.
Are high interest rates and a safe investment offered at the same time? As a rule, above-average returns are not possible with safe investments.
Is a margin call agreed? Then you should calculate the risks very carefully.
A particularly important and generally applicable rule - you should only invest if you really understand the investment on offer.