ASE Investment AG

In the years 2006 to 2012, ASE (Anlage-Sicherheit-Ertrag) promised investors returns of up to 18% per year. The supposedly safe investment ended in a total loss for the investors. Instead of sustainable asset management, ASE operated a snowball system. The damage was estimated at around CHF 170 million. Around 2500 investors suffered losses.

The million-dollar fraud started in the Canton of Aargau, where ASE Investment AG was incorporated. ASE Investment AG stood for "investment, security, income" and offered foreign exchange trading to clients as an external asset manager. Martin Schlegel was the managing director and the driving force behind the snowball system. Chairman of the board and accomplice was Simon Müller. The explosive aspect of this is that the Basler Kantonalbank was also involved as a custodian bank and, in the opinion of the main offender Schlegel, should have been suspicious. "Actually, everyone could have seen it if they had asked the right questions," he said in the High Court. The people in charge also used the Basler Kantonalbank for their marketing purposes and praised the foreign exchange business with dream returns as safe thanks to the state guarantee of the Basler Kantonalbank.

But how could such an obvious snowball system function over several years? On the one hand, this was due to the scruppelessness of the people involved, on the other hand Schlegel used secret accounts in Canadian dollars to hide the accumulated losses of investors. They operated with forged account statements and forged signatures. The investors were faked profits.

While Schlegel received a five-year prison sentence in the district court, the higher court reduced it to 28 months on appeal. The public prosecutor's office went to the Federal Supreme Court against this lenient sentence and was proved right. The Federal Supreme Court qualified the conduct of the Chairman of the Board of Directors, Müller, as "grossly in breach of duty". According to the Federal Supreme Court, Müller had shown "complete indifference to the fate of customer funds". The million-dollar fraud will now once again come before the High Court, which will have to look over the books once more.

The main accused received a substantially higher prison sentence of nine years from the district court. Furthermore, a former customer advisor of the Basler Kantonalbank was punished with a conditional prison sentence of 18 months. The district court also ruled on civil claims and awarded the aggrieved investors CHF 30 million, which the former managing director and board of directors of ASE must pay. Allegedly, the Basler Kantonalbank has reached a settlement of CHF 50 million with some of the aggrieved investors.

In parallel to the criminal proceedings, the former CEO of Basler Kantonalbank was convicted by the Federal Department of Finance in 2020 for violation of the obligation to report suspected money laundering. The Federal Department of Finance argued that if the suspicion had been reported in time, the criminal prosecution authorities could have intervened much earlier.

"Should the Basler Kantonalbank also be convicted, the aggrieved investors could possibly hold themselves harmless against it."

For the remaining cheated investors this is a glimmer of hope. Should the Basler Kantonalbank also be condemned because it tolerated the money laundering of ASE Investment AG, the aggrieved investors could possibly hold themselves harmless. Around 300 aggrieved investors have obtained a ruling from the High Court of the Canton of Aagrau that the public prosecutor's office must continue the criminal proceedings against the Basler Kantonalbank, which was confirmed by the Federal Court in 2019. The criminal proceedings against the Basler Kantonalbank will now be reopened.