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Infomatec chief executive Gerhard Harlos and his deputy Alexander Häfele were accused of insider trading, after issuing a misleading press release last year.
The executives are believed to have profited to the tune of around €14m (£8.74m) by reporting inflated sales figures, among other things. Both face possible imprisonment of up to five years if found guilty.
WestLB helped manage the Infomatec initial public offering (IPO). Over the weekend a spokesman said the bank was not aware of any wrongdoing and expected "the investigation to confirm this".
If the public prosecutor comes up with evidence against WestLB, the bank could be made liable for some €250m that private investors lost in Infomatec. In September the Augsburg administrative court made an unprecedented decision, ruling that a small investor misled by the false sales figures should be reimbursed for his losses of around €50,000.
Once considered a high flyer on Germany's Neuer Markt, Infomatec was forced into insolvency last year. A buyer has yet to be found.