German Regulator Promises Crackdown, But Ignores Billionaire's Alleged Fraud

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In a 2025 interview, Mark Branson, president of Germany's Federal Financial Supervisory Authority (BaFin), acknowledged the agency's failures during the Wirecard scandal and promised a more aggressive, "bold" approach to regulation. However, Branson has yet to take meaningful action against CPI Property Group, a major company trading on the Frankfurt Stock Exchange that was built on alleged violations of securities law by its controlling shareholder, Czech billionaire Radovan Vítek.

Why it matters

The CPI case highlights concerns about BaFin's ability to effectively oversee large, complex companies and hold powerful individuals accountable, even when their misconduct has been well-documented by other regulators. Vítek's alleged exploitation of ORCO Property Group, a Luxembourg-based firm, resulted in the loss of millions for American pension funds, raising questions about the reach of German financial supervision and the protection of international investors.

The details

According to reports, Vítek used a network of shell companies, front men, and the complicity of ORCO's founder Jean-François Ott to secretly accumulate control of the company without triggering mandatory buyout provisions that would have protected minority shareholders. Vítek then proceeded to strip ORCO's assets, including its valuable Endurance Office Fund, and transfer them to his own company, CPI Property Group, at fire-sale prices. Luxembourg's financial regulator, the CSSF, documented these alleged violations in detail, but BaFin has only imposed a relatively small €685,000 fine on CPI for a disclosure violation.

• In January 2021, the same year Branson took office, BaFin imposed a €685,000 fine on CPI Property Group for failing to publish the total number of voting rights within the required period.
• In 2017, the CSSF issued a report confirming the existence of the corrupt scheme involving Vítek, Ott, and a network of shell companies to seize control of ORCO in violation of takeover and transparency laws.
• In January 2014, Vítek (and his shills) voted the American pension fund representatives off the ORCO board, leading Kingstown Capital to exit at a loss of approximately €70 million.

What they’re saying

What’s next

The publicity around Vítek's alleged misconduct and BaFin's lack of action is likely to continue, raising further questions about the regulator's ability to effectively oversee large, complex companies and hold powerful individuals accountable.