First-step analysis: securities litigation in Greece


Claims

General climate

Describe the nature and extent of securities litigation in your jurisdiction.

Being an EU jurisdiction, Greece maintains an EU-harmonised regulatory environment with respect to financial regulation, including securities regulation.

The Greek regulatory framework on securities contains specific rules and comprises a plurality of legislative texts: Markets in Financial Instruments Directive (MiFID II); Athens Stock Exchange Regulation; Regulation of Clearing and Settlement of Securities; Regulation of DSS; Regulation of Clearing of Derivatives; legal provisions on the issuance of a prospectus, on mandatory public offerings and on protection against insider trading and market abuse. The aforementioned safety net of securities laws affords ample protection to market players and investors and delineates the nature of securities regulation in this jurisdiction.

The basis for civil disputes is statutory and these disputes derive from securities transactions, mandatory public offerings, prospectus requirements, shareholders disputes, initial or periodic disclosure liability for issuers, claims of clients against investment firms or vice versa. Civil disputes may additionally take the form of criminal proceedings when special criminal provisions are breached (ie, insider trading) in parallel or if general fraud can be established and may be brought either by an aggrieved party or by the regulator. The latter is also the initiating party of administrative litigation, when sanctions for breach of securities laws are imposed. We mainly refer to civil claims by the term securities litigation. Since the boom of capital markets in Greece, starting at the end of the 1990s, securities litigation in the above forms has kept commercial courts in Greece fairly busy. A highlight is the Folli Follie case, which is expected to produce a wide variety of civil, criminal and administrative claims against the issuer, shareholders, advisers, auditors and other intermediaries involved in the controversy.

Available claims

What are the types of securities claim available to investors?

Common law claims are not relevant in this jurisdiction.

With respect to civil litigation, claims may be brought on the basis of the following:

The Market Abuse Regulation (MAR) (Regulation (EU) No. 2014/596 and Law 4443/2016, enacting the required measures for ensuring compliance with the MAR and further incorporating Directive 2014/57/EU on criminal sanctions for market abuse, establishes the framework on insider dealing, the unlawful disclosure of inside information and market manipulation (market abuse). Should this framework be infringed, an investor suffering damage may invoke the infringement and bring a claim against the party at fault invoking the general tort provisions in parallel.

Law 4514/2018, transposing into Greek legislation the MiFID II (Directive 2014/65/EC) as amended, sets out the conduct standards for financial firms and credit institutions providing investment services to ensure that potential clients have the necessary knowledge and competence to make an informed investment decision (the suitability and appropriateness principle). In this respect, when a firm fails to comply with its MiFID II obligations, it may be held liable by clients under general tort provisions. Furthermore, this law provides that any investment firm offering algorithmic trading shall ensure that there is a binding written agreement between the investment firm and the client under which the firm shall assume responsibility for the services offered. Hence, claimants may pursue claims against these firms arising from liability out of contract.

Further, an investor may bring a claim against auditors or accountants on the basis of tort provisions in the preparation of an audit report on the financial statements in the event the audit is faulty according to the applicable standards (ie, non-compliance with International Accounting Standards and Law 4308/2014 on Greek Accounting Standards) or breach of the confidentiality duty.

Law 3401/2005, incorporating the Prospectus Directive (Directive 2003/71/EC), provides for a special form of civil liability arising out of the publication of the prospectus and the violation of trust when the prospectus is inaccurate or incomplete. An investor who has incurred damage with respect to securities acquired within the first 12 months of the issuance of the prospectus on the faith of untrue statements contained therein (for instance, false representations in the financial statements) or owing to information omitted that is required may raise a claim for compensation against the issuer, the directors, the offeror, the person asking for the admission to trading on a regulated market, the underwriters or other experts.

Law 3461/2006 on mandatory public offerings, incorporating Directive 2004/25/EC on takeover bids, that a shareholder (offeror) must launch a mandatory bid for the total securities of the offeree company if it holds securities of a company and either (i) exceeds the threshold of one-third of the total voting rights of the company or (ii) holds over one-third without exceeding half of the total voting rights and acquires securities representing over 3 per cent of total voting rights within 12 months. If the shareholder (offeror) breaches this obligation or purchases the securities at a non-equitable price, the shareholders of the offeree company shall have the right to file a claim on the basis of tort provisions against the offeror. Further, this law provides for civil liability of the offeror, the adviser (ie, credit institutions or investment firms) and the persons responsible for the issuance of the prospectus with respect to the accuracy and completeness of the latter. The provisions of Law 3556/2007 as amended by Law 4374/2016, which are currently in force, transpose Directive 2013/50/EU amending Directive 2004/109/EC into Greek legislation. The transparency requirements stipulated therein, provide for a regular flow of information through the periodic and ongoing disclosure obligation by the security issuers. To the same end, shareholders holding voting rights of a specific percentage that result in an entitlement to acquire existing shares with voting rights, should also inform issuers of the acquisition, so that the latter are able to inform the investors. Violation of this obligation may result in liability on the basis of tort provisions.

Regulation (EU) No. 462/2013, amending Regulation (EC) No. 1060/2009, establishes a special form of civil liability regarding credit rating agencies. On the basis of article 35a of the Regulation, an investor or issuer may claim damages from a credit rating agency for damage incurred owing to infringements listed in its provisions. The conditions of liability are interpreted and applied in accordance with national law. The liability stemming from the Regulation is not exclusive; therefore, claims against credit rating agencies can also be founded on the general provisions for tort liability or on the provisions regarding consumer protection. These claims are not frequent in Greece.

Investors may also seek protection under the Consumer Law provisions (Law 2251/1994 as amended and in force) in cases involving unfair commercial practices for the provision of investment services (mainly by financial institutions, in the majority of cases brought before Greek courts).

Tort provisions may further apply to establish general tort liability where there is no contract and once intention or negligence is found in the conduct of the parties.

Offerings versus secondary-market purchases

How do claims arising out of securities offerings differ from those based on secondary-market purchases of securities?

Claims arising out of securities offerings usually relate to prospectus’ discrepancies and are filed against the issuer and possibly the persons responsible for the prospectus’ content under the above statutory provisions.

Claims arising in the secondary market are mainly claims against intermediaries for wrong execution or advice provided, or claims that hinge on the inadequate or misleading information concerning the disclosure of obligations of listed companies.

Public versus private securities

Are there differences in the claims available for publicly traded securities and for privately issued securities?

Laws on publicly traded securities contain strict provisions (prospectus issuance requirements, the obligations under MiFID II, the market abuse provisions, etc), which ensure effective protection to the buyers of these securities; whereas for privately issued securities, the purchaser must rely on the seller’s representations and warranties.

Primary elements of claim

What are the elements of the main types of securities claim?

Prospectus liability claims on the basis of Law 3401/2005 can be brought against any person responsible for the preparation and issuance of the prospectus and the information contained therein, in the case of inaccurate, misleading or omitted information or a breach of duty.

With respect to mandatory public offerings, the offeror is required to prepare and publish in good time a prospectus entailing all necessary information relating to the offering to enable the shareholders of the offeree company to reach a properly informed decision on the bid. Consequently, the persons responsible for the issuance of the prospectus may incur liability for non-performance of their duty. Further, the shareholders of the offeree company may bring an action against the offeror on the basis of general tort provisions, subject to certain conditions.

Issuers must inform the public as soon as possible of inside information that directly concerns them to ensure fast access and complete, correct and timely assessment of the information by the public.

Furthermore issuers must: (i) draw up a list of all persons who have access to inside information and who are working for them under a contract of employment, or otherwise performing tasks through which they have access to inside information (insider list) and provide this insider list to the Hellenic Capital Market Commission; and (ii) announce promptly and no later than three business days after the date of the transaction, every transaction conducted relating to securities of the persons discharging managerial positions or persons closely associated to them. Investors who sustained damage owing to the omission of the issuer to announce accurate or complete information or owing to inaccurate information that has been released, in breach of the market abuse rules, may seek compensation.

MiFID II sets out the organisational rules with which authorised intermediaries must comply during the performance of investment services offered. The services offered need to be tailored to reflect the investor’s risk profile and economic capacity. Non-conformity with the organisational rules may have as a consequence the intermediaries’ liability under general tort provisions.

Materiality

What is the standard for determining whether the offering documents or other statements by defendants are actionable?

In accordance with prospectus liability claims, liability is established owing to a defect in the prospectus rendering it inaccurate or incomplete. A prospectus is considered inaccurate if it contains false or vague information, and incomplete if it omits information that is crucial to the investor’s decision. The incorrect or omitted information in the prospectus must be material. The prospectus is considered complete and accurate when its content can be understood by an average investor and the latter can rely on the information contained therein to make to a well-informed investment decision.

Under the framework on the prohibition of insider dealing and of unlawful disclosure of inside information, the latter should be false or misleading and directly influence the investment decision or the price of the securities.

Scienter

What is the standard for determining whether a defendant has a culpable state of mind?

Greek civil law stipulates that apart from intent, negligence alone suffices for establishing liability. Negligence presupposes the violation of the duty of care. Securities litigation is no exception to this rule.

A special provision deviating from the above general principle requires intent or gross negligence for establishing the liability of credit rating agencies under Regulation (EU) No. 462/2013.

Reliance

Is proof of reliance required, and are there any presumptions of reliance available to assist plaintiffs?

Under the prospectus liability rules, the investor is required to prove that he or she relied on the incomplete or inaccurate prospectus when proceeding with his or her investment decision. The same principle applies where the investor, when making an investment decision, relies on false or misleading information published by the issuer, namely by means of the issuer’s financial statements, announcements, etc.

Although it has been argued that the ‘fraud on the market’ doctrine may apply in cases brought before Greek courts in the sense that the financial instruments’ prices reflect the publicly disseminated information (efficient market hypothesis) and that the investor relying on the current price indirectly relies on that information, Greek judges remain reluctant to depart from the causation principle.

Causation

Is proof of causation required? How is causation established?

Proof of causation is a necessary element for any claim. Greek procedural rules stipulate that the claimant has the onus to prove causation unless there is fraud in the market.

Investment service providers bear strict liability; the burden of proof is on them to establish absence of fault.

In claims on the ground of prospectus liability, the investor has the burden to prove that he or she sustained losses owing to the transaction that he or she proceeded with on the basis of false or omitted information in the prospectus, which furthered the extent of the damage suffered. By way of deviation from the general rule, restitution covers only actual damage suffered. The same principle applies with respect to mandatory public offerings under the provisions of Law 3461/2006.

In all other claims, the general rule applies, meaning that the investor has the onus to prove the illegal behaviour, the damage suffered and the causal link between the behaviour and the damage incurred (ie, fulfilment of the conditions of article 914 of the Greek Civil Code on tort liability).

Other elements of claim

What elements present special issues in the securities litigation context?

No other elements in practice present special issues in a securities litigation context.

Limitation period

What is the relevant limitation period? When does it begin to run? Can it be extended or shortened?

The limitation period for claims arising out of invalid or omitted information from the prospectus is three years from the issuance of the prospectus.

For mandatory public offerings the limitation period of claims is three years from the end of the period of acceptance.

A claim for damages under tort provisions becomes time-barred five years after the date on which the party that suffered the damage became aware of the loss and of the person liable. In any case, a claim becomes time-barred 10 years after the occurrence of the event that caused the loss.

Partial payments of the claimed amount or the provision of security interrupt the limitation period as they constitute interruptive events. The same applies in the case of initiation of enforcement proceedings or filing of a claim with a court or arbitral tribunal.

Defence, remedies and pleading

Defences

What defences present special issues in the securities litigation context?

A defendant can escape liability if he or she proves that:

  • he or she acted diligently;
  • the information contained in or omitted from the prospectus was not material or that it did not influence the investment decision (therefore, materiality of the information under scrutiny is a particular issue);
  • the damage suffered by the investor is the result of circumstances other than the decline in the value of the securities arising from the material misstatements or omissions;
  • the extent of the damage suffered is not substantiated – this may be a challenging exercise in the case of listed securities, mainly where there is significant price fluctuation; or
  • the claimant was aware of the unlawful conduct (inter alia, false or omitted information in the prospectus, unlawful disclosure of inside information) when he or she acquired the security.

Remedies

What remedies are available? What is the measure of damages?

Investors may seek restitution of the damage incurred (ie, positive damage and loss of profits) via monetary compensation. However, liability of the persons responsible for the issuance of the prospectus covers only investors’ positive damage.

There is no provision for rescission or cancellation of the transaction since the latter is anonymous and, further, this provision could jeopardise the function of the regulated market and violate the rights of bona fide investors.

Pleading requirements

What is required to plead the claim adequately and proceed past the initial pleading?

For securities claims to be properly filed (similarly to ordinary civil claims) they must fulfil the requirements on the content and form stipulated by the Greek Civil Procedure Rules (article 215 ff), including, the factual background of the case, the legal bases on which the claim is founded and the request for damages. The claimant must produce and submit the evidentiary material within specified deadlines. The standard of pleading requirements or proof does not differ in fraud cases. The court will accept the case for consideration and, provided that the procedural requirements are met, will examine the merits of the case.

Procedural defence mechanisms

What are the procedural mechanisms available to defendants to defeat, dispose of or narrow claims at an early stage of proceedings? What requirements must be satisfied to obtain each form of pretrial resolution?

During first instance proceedings, no preliminary examination of the filed claims is provided within the existing procedural mechanisms under Greek law. Pretrial resolution may only be reached in the event of settlement, when a claimant waives the claim (in full or in part) resulting in the dismissal of the former or the narrowing of the claimed amount, respectively.

However, in the proceedings before the Council of the State and the Supreme Court, dismissal on a preliminary basis is provided for when the claim is inadmissible or manifestly unfounded. Of course, should a case go to the Supreme Court or the Council of State it would be the final stages of proceedings.

Liability

Secondary liability

Are the principles of secondary, vicarious or ‘controlling person’ liability recognised in your jurisdiction?

Yes, these principles of liability may be recognised on the basis of the agency theory. The direct targeting of a controlling interest is envisaged in the mandatory public offerings.

Claims against directors

What are the special issues in your jurisdiction with respect to securities claims against directors?

Law 3016/2002 regulates issues of corporate governance. The primary and general obligation of the board of directors of a listed company is to constantly pursue the continuous financial value of the latter and vindicate the company’s general interest.

Directors may be held liable under the statutory provisions on market abuse (Law 4443/2016) in case of insider dealing arising when a director possesses inside information and uses that information by acquiring or disposing of financial instruments to which that information relates; unlawful disclosure of inside information when a director possesses inside information and discloses that information to any other person; and market manipulation.

Breach of the periodic and ongoing information requirements for security issuers pursuant to Law 3556/2007, may grant investors a claim against directors on the basis of tort provisions.

Further, the directors’ involvement in the preparation and issuance of the prospectus, either under Law 3401/2005 provisions on prospectus liability or under Law 3461/2006 on mandatory public offerings, may result in them being held liable.

Additionally, investors may bring a claim against directors under tort provisions on the basis of securities fraud.

Claims against underwriters

What are the special issues in your jurisdiction with respect to securities claims against underwriters?

Law 3401/2005, transposing the Prospectus Directive (Directive 2003/71/EC) into Greek legislation, provides for the express liability of underwriters for the preparation and issuance of the prospectus and the information contained therein.

When the investor incurs damage from the underwriter with respect to the provision of investment services, the underwriter may be held liable under the Consumers’ Law provisions.

Investors may also seek protection under the Consumer Law provisions (Law 2251/1994 as amended and in force) in cases involving unfair commercial practices (mainly by financial institutions, in the majority of cases brought before Greek courts).

Claims against auditors

What are the special issues in your jurisdiction with respect to securities claims against auditors?

Investors may bring an action against statutory auditors and audit firms in any of the following cases:

  • for damage incurred by the use of the audit report (failure to comply with International Accounting Standards and Greek Accounting Standards) – the compensation awarded by the court cannot be more than tenfold their audit fee;
  • for the incorrect, misleading or omitted information contained in corporate documentation that the statutory auditor or audit firm was obligated to review (eg, the prospectus); or
  • for the violation of the strict rules on confidentiality and professional secrecy.

Collective proceedings

Availability

In what circumstances does your jurisdiction allow collective proceedings?

Class actions and collective proceedings are not generally provided for in Greek law. Actions brought by multiple claimants are, however, possible.

An exception to the rule is introduced by article 10 of the Consumers’ Law, which provides that consumer associations (constituted as unions) aiming to protect the rights and interests of consumers are entitled to represent consumers in court and file representative collective actions. In particular, a consumer union of at least 500 members, which has been duly registered in the Registry of Consumer Unions for at least one year, may file an action of any kind for the protection of the general interests of consumers, provided that the illegal behaviour in question infringes the rights of at least 30 consumers without distinguishing between members and non-members of these consumer unions.

Opt-in/opt-out

In collective proceedings, are claims opt-in or opt-out?

Class actions are not provided for in Greek law.

Damages

Can damages be determined on a class-wide basis, or must damages be assessed individually?

Class actions are not provided for in Greek law. However, in claims brought by multiple claimants, damages are assessed individually.

Court involvement

What is the involvement of the court in collective proceedings?

Greek law does not provide for class actions and consequently there are no class certifications.

Regulator and third-party involvement

What role do regulators, professional bodies and other third parties play in collective proceedings?

Greek law does not provide for collective proceedings.

Funding and costs

Claim funding

What options are available for plaintiffs to obtain funding for their claims?

Contingency fees and other conditional arrangements are allowed between clients and lawyers (article 60 of the Lawyers’ Code (Law 4194/2013)) and the maximum fee percentage agreed may not exceed 20 per cent of the subject matter of the case (or 30 per cent if more than one lawyer is involved).

The notion of third-party funding is not very familiar or popular in Greece but certain insurance companies offer legal expenses protection, which therefore the costs of litigation. At the moment there are no rules or restrictions on funders and, therefore, a funding agreement or damages-based agreement would be considered an independent agreement. However, since there is no regulatory provision, satisfying the agreement cannot be a priority in claims proceedings.

Costs

Who is liable to pay costs in securities litigation? How are they calculated? Are there other procedural issues relevant to costs?

The court has discretion to award and allocate expenses in whole or in part and it is usually the unsuccessful party that is ordered to pay the costs. Costs are set by means of a statutory calculation method that depends on the claimed amount (for instance, in cases where the claimed amount is up to €200,000 the legal fee is 2 per cent). Further, each party bears its own legal fees.

Investment funds and structured finance

Interests in investment funds

Are there special issues in your jurisdiction with respect to interests in investment funds? What claims are available to investors in a fund against the fund and its directors, and against an investment manager or adviser?

There are two types of collective investment undertakings (funds) provided for under Greek law:

  • the undertakings for collective investment in transferable securities (UCITS), which may take the form of a mutual fund or a variable capital investment company, and UCITS are governed by Law 4099/2012, as amended by Law 4416/2016, implementing Directive 2009/65/EC (UCITS IV) as amended by Directive 2014/91/EU (UCITS V); and
  • the alternative investment funds governed by Law 4209/2013 implementing Directive 2011/61/EU on Alternative Investment Fund Managers.

Articles 81 and 82 of Law 4099/2012 provide for a special form of civil liability arising out of the obligation of the investment company and, for each of the common funds it manages, the management company, which sells UCITS directly or through another natural or legal person that acts on its behalf and under its full and unconditional responsibility, to provide investors with key investor information on these UCITS investors free of charge and in good time before their proposed subscription of units in the UCITS. The basic information is provided to investors via the key investor information document, which enables the investors to understand the nature and the risks related to the issuer and the financial instruments that are on offer. The persons that draw up, approve or provide key investor information are liable for this information if it is misleading, inaccurate or inconsistent, including any translation thereof.

Structured finance vehicles

Are there special issues in your country in the structured finance context?

Structured finance vehicles commonly used in Greece are asset-backed securities structures, securitisation structures, collaterised obligations (namely collateralised debt obligations or collateralised loan obligations) and their derivatives. Assets backing those vehicles are, inter alia: shares, bonds, foreign currencies and all kinds of futures, options, currency and interest rate swaps and similar instruments, including commodity futures and commodity options, invoices, all types of receivables, obligations evidencing debt (including credit card debt, performing or non-performing leveraged loans, unsecured loans and structured deposits – added as an investment product by the Markets in Financial Instruments Directive), lease contracts, acceptance credits, mortgages, carbon offsets and contracts for insurance and for reinsurance.

Structured finance vehicles are usually addressed to sophisticated investors. Securities issued by these vehicles can, in principle, be publicly traded. The claims available to structured finance trustees, investors and financial guarantee insurers are detailed below.

Prospectus liability claims on the basis of Law 3401/2005 can be brought against any person responsible for the preparation and issuance of the prospectus and the information contained therein, in the event that inaccurate, misleading or omitted information is discovered or in the event of breach of duty.

With respect to mandatory public offerings, the offeror is required to prepare and publish in good time a prospectus entailing all necessary information relating to the offering to enable the shareholders of the offeree company to reach a properly informed decision on the bid. Consequently, the persons responsible for the issuance of the prospectus may incur liability for non-performance of their duty. Further, the shareholders of the offeree company may bring an action against the offeror on the basis of general tort provisions, subject to certain conditions.

Issuers must inform the public as soon as possible of inside information that directly concerns them to ensure fast access and complete, correct and timely assessment of the information by the public.

Furthermore issuers must (i) draw up a list of all persons who have access to inside information and who are working for them under a contract of employment, or otherwise performing tasks through which they have access to inside information (insider list) and provide this insider list to the Hellenic Capital Market Commission; and (ii) announce promptly and no later than three business days after the date of the transaction, every transaction conducted relating to securities of the persons discharging managerial positions or persons closely associated to them. Investors who sustained damage owing to the omission of the issuer to announce accurate or complete information or owing to inaccurate information that have been released, in breach of the aforementioned market abuse rules, may seek compensation.

MiFID II sets out the organisational rules with which authorised intermediaries must comply during the performance of investment services offered. The services offered must be tailored to reflect the investor’s risk profile and economic capacity. Non-conformity with the above rules may have as a consequence the intermediaries’ liability under general tort provisions.

The remedies available to structured finance trustees, investors and financial guarantee insurers are detailed below:

Investors may seek restitution of the damage incurred (ie, positive damage and loss of profits) in the form of monetary compensation. However, liability of the persons responsible for the issuance of the prospectus covers only investors’ positive damage.

There is no provision for rescission or cancellation of the transaction since the latter is anonymous and, further, this provision could jeopardise the function of the regulated market and violate the rights of bona fide investors.

Cross-border issues

Foreign claimants and securities

What are the requirements for foreign residents or for holders of securities purchased in other jurisdictions to bring a successful claim in your jurisdiction?

The general jurisdiction principle is that Greek courts are competent for claims arising against defendants domiciled in Greece. In the case of tort claims, competency of Greek courts can be established if the harmful event occurred in Greece. Otherwise, Greek courts’ exclusive jurisdiction may be established under the express agreement of the parties.

Foreign defendants and issuers

What are the requirements for investors to bring a successful claim in your jurisdiction against foreign defendants or issuers of securities traded on a foreign exchange?

On the basis of tort provisions, an investor may bring a claim before Greek courts when the harmful event occurred in Greece, as provided under Brussels I-bis Regulation, covering both the place where the damage occurred and the place of the event giving rise to it; whereas on a contractual basis, competence of the Greek courts is established by an express contractual clause.

Multiple cross-border claims

How do courts in your jurisdiction deal with multiple securities claims in different jurisdictions?

The Brussels I-bis Regulation (Regulation (EU) No. 1215/2012) stipulates that, where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court. If the parties agreed to confer exclusive jurisdiction to a Greek court, any court of another member state will stay the proceedings until such time as the Greek court declares that it has no jurisdiction under the agreement. If the Greek court designated in the agreement has established jurisdiction, then any court of another member state must decline its jurisdiction.

If proceedings are pending before a court of a third state at the time when a Greek court is seised of a claim involving the same cause of action between the same parties, the Greek court may continue the proceedings at any time:

  • if the proceedings in the court of the third state are stayed or discontinued;
  • if it appears to the Greek court that the proceedings in the court of the third state are unlikely to be concluded within a reasonable time; or
  • if the continuation of the proceedings is required for the proper administration of justice.

The Greek court will dismiss the claim if the proceedings in the court of the third state are concluded and have resulted in a judgment capable of recognition and, where applicable, of enforcement in Greece.

Enforcement of foreign judgments

What are the requirements in your jurisdiction to enforce foreign court judgments relating to securities transactions?

EU member state judgments are automatically recognised in Greece and are directly enforceable pursuant to the Brussels I-bis Regulation (Regulation (EU) No. 1215/2012). The foreign judgment, together with the annexed form provided for in the Regulation, is required to be served to the defendant in Greece.

The foreign judgment can be challenged for the following reasons (article 45 of the Brussels I-bis Regulation):

  • the recognition of the judgment is manifestly contrary to public policy;
  • the defendant was not properly served with the document that instituted the proceedings, thus depriving him or her of the right to structure his or her defence, unless he or she failed to commence proceedings to challenge the judgment when it was possible for him or her to do so;
  • the judgment is irreconcilable with an earlier judgment given by a Greek court or a foreign court between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in Greece; or
  • the judgment conflicts with sections 3, 4, 5 or 6 of Chapter II of the Regulation in cases where the policyholder, the injured party or the consumer was the defendant.

For judgments issued by non-EU member states, multilateral conventions, such as the Brussels Convention of 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, and bilateral treaties between Greece and non-EU countries apply.

Alternative dispute resolution

Options, advantages and disadvantages

What alternatives to litigation are available in your jurisdiction to redress losses on securities transactions? What are the advantages and disadvantages of arbitration as compared with litigation in your jurisdiction in securities disputes?

Parties may choose mediation or arbitration as an alternative dispute resolution (ADR) method, even for actions pending before the court.

Although mediation is not currently popular, the recent enactment of Law 4640/2019 regulating the mediation procedure aims to incentivise parties to resort to this ADR method. The new provisions stipulate a mandatory preliminary mediation session for certain disputes, among which are disputes falling under the scope of ordinary proceedings and within the competence of multimember courts of first instance and single member courts of first instance for claims over €30,000. Regarding these disputes, prior to the filing of any legal action, lawyers are obliged to inform their clients via written notification and to file this before the competent court until the date of hearing under the penalty of the inadmissibility of the hearing. Additionally, this law introduces a significant cost (approximately 1 per cent), namely a state fee, for all disputes that have a value exceeding €250,000, including those that are pending.

Arbitration offers speedy and efficient resolution of the dispute, as parties benefit from the advanced knowledge of an experienced panel of experts. However, arbitration costs tend to be high, which may mean parties choose litigation as the costs are lower.

Update and trends

Key developments of the past year

What are the most significant recent legal developments in securities litigation in your jurisdiction? What are the current issues of note and trends relating to securities litigation in your jurisdiction? What issues do you foresee arising in the next few years?

Recent legislative developments

A recent legislative development was the enactment of Law 4640/2019, regulating mediation in national and cross-border civil and commercial disputes, aiming to establish attempting mediation as a prerequisite to resorting to courts.

Further, the level of investor protection has been increased by the transposition to Greek law of the Markets in Financial Instruments Directive II (MiFID II) (Directive 2014/65/EU) by virtue of Law 4514/2018. This regime sets new rules and requirements for investment firms, while also expanding the scope to cover structured deposits. MiFID II is supplemented by the Markets in Financial Instruments Regulation (Regulation (EU) No. 600/2014), and together constitute the single rulebook on EU financial markets.

Case highlights

An interesting, widespread and ongoing securities case unravelled in 2018 in Greece regarding a listed company, in which a number of international investors had invested both in equity and in debt.

According to publicly available information, the Hellenic Capital Market Commission (HCMC) sued the company’s board members and financial directors after concerns were raised over its finances and doubt was cast over the number of points of sale the company operates. The company’s shares suffered heavy losses on the Athens Stock Exchange as a result, which prompted the regulator to ask for the scrutiny of its consolidated financial statements by an independent auditing firm. Following the company’s failure to submit the requested information, a preliminary investigation was carried out. There have been numerous developments during the last two years, among which are the filing of the first investors’ lawsuits, the filing by bondholders of a bankruptcy application and the HCMC’s filing of a petition for the replacement of a board member under Law 4640/2019. The responsibility of the auditors and members of the audit committee has also been pursued, making this case a very interesting multidimensional securities litigation case in this jurisdiction.

Law stated date

Correct on

Give the date on which the information above is accurate.

29 January 2020



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