BaFin made a petition for the initiation of insolvency proceedings regarding Phoenix after the new management of the company had notified BaFin about irregularities with regard to the existence of an account at a London brokerage firm, which Phoenix had used to execute financial transactions. These irregularities, which were discovered beginning of March, concern apparently manipulated account statements of Phoenix feigning the existence of assets amounting to about 600 million euros. Upon advice of BaFin the company's management informed the criminal prosecutor last week.

It is suspected that the damage to investors may amount to hundreds of millions of euros. In order to enable investors to file claims with the German investor compensation scheme for securities services companies (Entschädigungseinrichtung der Wertpapierhandelsunternehmen, EdW) BaFin will now determine that compensation is payable with regard to Phoenix Kapitaldienst GmbH. The EdW will then decide whether the individual claims are justified. In the meantime BaFin has installed an information hotline which will provide information to investors from Monday to Friday from 8 a.m. to 6 p.m. under the following telephone number: 0228-4108-1010. Investors may also call the EdW for further information under 030-203699-5626.

Updated (06.04.2006):

The information hotline was discontinued as of 6 April 2006. However, investors can contact the BaFin Consumer Hotline Monday through Friday from 8am to 6pm. The telephone number is: 0180 – 1 22346 (12 cents per minute in Germany).