Legal Q&A · Company financing

A bank sold me corporate bonds as a safe investment, and the issuer is not paying. Is the seller liable?

Law as at 3 October 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

The bank is not automatically liable merely because the issuer is not paying. The debt remains the issuer's obligation. However, the bank may be liable to you for loss if it breached its duties when selling the bond, for example by misleadingly presenting it as safe, failing to explain the risks or recommending it without assessing whether it was suitable for you. Generally, you must also prove that you would not have invested had the bank acted properly. At the same time, preserve your claim against the issuer. The Investment Guarantee Fund does not cover the issuer's failure to pay.

A bank employee offered you corporate bonds paying higher interest than a deposit and described them as a safe investment. The issuer then stopped paying the return or failed to repay the principal. The issuer still owes you the money, and you need to pursue your claim against it, as explained in the question the issuer has failed to pay a bond. However, the seller may have breached the rules of the Securities Act (Act No. 566/2001 Z. z.) when selling the bonds and may be liable for the loss caused by that breach. The rules governing an investment firm’s conduct towards clients also apply to banks providing investment services (Section 79a(2)).

What the seller was required to do

The starting point is a rule applying to all information the seller gives clients:

The following quotation is reproduced in its original language:

Všetky informácie vrátane marketingového oznámenia, ktoré adresuje obchodník s cennými papiermi klientom alebo potenciálnym klientom, musia byť jednoznačné, prehľadné a nezavádzajúce.

§ 73c zákona č. 566/2001 Z. z.

The seller was required to explain clearly the risks of the bond and whether it was intended for retail clients, taking its target market into account (Section 73d(1), letter b)). If the seller made a personal recommendation to you to buy the bond, this may have constituted investment advice (Section 6(6)). In that case, the seller had to establish your knowledge and experience, your financial situation, including your ability to bear losses, and your investment objectives; recommend only a suitable instrument (Section 73f(1)); and provide you with a written suitability statement before the transaction (Section 73f(3)), or, for a distance transaction, immediately afterwards if the conditions in Section 73f(4) were met. For other services, the seller was required to assess appropriateness and warn you if the bond was not appropriate for you (Section 73g). The seller was exempt from this duty only if all the conditions in Section 73h(1) were met, including a transaction in a non-complex instrument carried out at your initiative after a clear warning that appropriateness would not be assessed. The article NBS and the sale of corporate bonds explains how the National Bank of Slovakia monitors compliance with these rules for corporate bonds.

If a financial agent arranged the bond investment for you, the agent is liable for loss caused in the course of financial intermediation, and an independent financial agent must hold insurance for this liability (Section 30(1) and (2) of Act No. 186/2009 Z. z.). In the case of a tied financial agent, the financial institution for which the agent works may have assumed liability (Section 30(6)).

When a claim for damages arises

A breach of duty alone is not enough to establish a claim for damages. The claim also requires loss and a causal link between the breach and the loss, so you generally need to prove that, had the seller acted properly, you would not have invested in the bond or would have invested differently. The documents from the sale are crucial: the knowledge and experience questionnaire, the suitability statement or warning that the investment was inappropriate, marketing materials, emails and records of conversations. The seller’s conduct is assessed under the version of the law in force at the time of the sale. Whether the claim is governed by the Civil Code or the Commercial Code, and which limitation period applies, depends on the nature of your contractual relationship with the seller. You should therefore not wait until recovery efforts against the issuer have ended before pursuing the claim.

What to do

  • Ask the seller for copies of all documents you signed or received when making the purchase.
  • Submit a written complaint to the seller. An investment firm must provide clients with at least one out-of-court mechanism for resolving complaints and disputes (Section 69(4) of Act No. 566/2001 Z. z.). The Slovak Trade Inspection does not handle disputes arising from financial services contracts in its capacity as an alternative consumer dispute resolution body (Section 3(2), letter c) of Act No. 391/2015 Z. z.).
  • The National Bank of Slovakia handles submissions from clients of supervised entities (Section 1(3), letter c) of Act No. 747/2004 Z. z.). A submission may lead to supervisory action concerning the seller. However, a claim for damages must be pursued against the seller, potentially through out-of-court dispute resolution or court proceedings.
  • At the same time, safeguard your claim against the issuer, particularly the deadline for lodging a claim if the issuer enters bankruptcy.

The Investment Guarantee Fund protects against the failure of the investment firm with which your assets are held, not against the issuer’s failure. This is explained in the article unpaid bonds, the guarantee fund and the seller. An approved prospectus is not a guarantee either, as we explain in the question does approval of a prospectus mean that the issue is safe.

Through our recovery of bond claims service, we assess both your claim against the issuer and how the sale was conducted. Send us the terms and conditions of the issue, a statement from your securities account and the documents you received from the seller.

This answer provides general information on the law as at 3 October 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.

More legal questions

All questions and answers
  1. We want our bonds to be traded on a stock exchange. What requirements must we meet, and is it worthwhile? The issuer or an exchange member applies for admission of bonds to the regulated market of the Bratislava Stock Exchange. The bonds must be in book-entry form, and the issuer must have an LEI and, subject to narrow exemptions, an approved and published prospectus. A prospectus is required even where the public offer alone would not require one. The issuer then becomes subject to annual and half-yearly financial reporting requirements (unless it issues only bonds with a denomination of at least EUR 100 000), disclosure of inside information and other disclosure obligations. A less demanding route is a multilateral trading facility, whose requirements are set by its rules. Whether admission is worthwhile depends on whether you want to give investors the option of selling their bonds before maturity and whether that benefit outweighs the cost of the prospectus and ongoing obligations.
  2. We have received a grant. Must we select the supplier through public procurement? A private company must follow the rules applicable to a contracting authority only where a contracting authority provides it with more than 50% of the funding for an above-threshold works contract or an above-threshold services contract connected with those works. In other cases, you do not have to follow the Public Procurement Act. For EU funding, however, supplier selection is governed by the grant agreement, and compliance is checked. A breach of the rules that could have affected the outcome leads to a request to repay part of the grant. In Czechia, the threshold is different and also covers below-threshold contracts.
  3. The provider claims we breached the grant rules and must repay the grant. Can we challenge this? You can challenge this, but you must follow precisely defined steps and deadlines. In Slovakia, you submit objections to the draft inspection report; otherwise, the findings are deemed accepted. If you do not repay the money following a request, a levy or financial correction is determined in administrative proceedings subject to judicial review. Alternatively, the provider may bring a court action. In Czechia, objections are submitted against the inspection record, and the tax office decides on a levy for a breach of budgetary discipline under the Tax Procedure Code. If you repay the money within the deadline stated in the request, further proceedings will generally not be initiated in either country, so you should first assess whether there are valid grounds for a challenge.
  4. Can our s. r. o. buy back its own business interest and hold it for future employees? No. A limited liability company cannot acquire its own business interests unless the law exceptionally provides otherwise (Section 120(1) of the Commercial Code), so an s. r. o. cannot create an equity pool for future employees. Its participation programme must use another structure: options over existing members' interests, phantom equity, or conversion to a simple joint-stock company.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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