BaFin Fines flatexDEGIRO Bank €560K Over "Misleading Free Investment Ads"
Germany’s financial regulator, BaFin, has penalised flatexDEGIRO Bank for misleading advertising and weak internal controls. The bank, which handles over 60 million securities transactions each year, faced fines totalling €1.61 million. Changes were later made to comply with stricter transparency rules.
In 2023, BaFin fined flatexDEGIRO Bank AG €560,000 for violating the German Securities Trading Act. The bank had promoted investment services as free without clearly disclosing a regular processing fee. Under the law, such advertising must present both benefits and risks in a balanced way.
The regulator also identified serious gaps in the bank’s internal controls. To address these, flatexDEGIRO was ordered to appoint a special representative. This monitor would ensure compliance with revised procedures. By 2022, the bank had adjusted its practices to meet legal standards. These changes followed warnings that further breaches could lead to penalties of up to €5 million or 10% of total revenue. With around 3 million customer accounts, flatexDEGIRO remains one of Europe’s largest online brokers. The fines and reforms highlight growing scrutiny over how financial services are marketed to investors.
The penalties imposed on flatexDEGIRO Bank reflect stricter enforcement of transparency in financial advertising. The bank has since updated its policies and controls to avoid further violations. Regulators continue to monitor compliance across the sector.
