Banco Popular bonds: New sentence in Madrid
The Provincial Court of Madrid has confirmed invalidity of a purchase of subordinated bonds of Banco Popular in Sentence 14 July 2015.
Don Victorino bought in October 2009, bonos convertibles del Banco Popular amounting to 50.000 euros. It is a person of German origin, who does not speak or read Spanish language correctly.
Given their losses, demand to Banco Popular requesting a declaration of nullity of the purchase order bond.
The Court of First Instance No. 41 Madrid, gave judgment estimating demand. In the same, nature was taken into account, characteristics and performance of the subordinated bonds exchangeable for shares of Banco Popular. The plaintiff was a businessman but investor lacked a history and had not had similar products. The emission was directed at wholesalers. The initiative was placing bank and there was financial advice. Is considered to It was not adequately informed about the product and its risks. And the declaration of nullity of the purchase, entails invalidity of the subsequent exchange by application of the doctrine of related business. The costs were imposed on the bench.
The People's Bank appealed to the Provincial Court alleging error in the assessment of evidence, considering that it had fulfilled its reporting obligations and that there was no error on the consent.
For the Provincial Court there was advice. Counseling,
"Not necessarily derived from written agreements reached between the parties as an essential element or require payment of a fee".
The Banco Popular Custom made a recommendation to the applicant, offering product purchase (art. 63.1.g LMV y STS 20 January 2014).
And the consequence of having undertaken advice, is that it should have conducted a test the suitability, It not made (art. 76 to 6 LMV).
Convenience test is presented as Document, lacking signature of the applicant and the answers are contradicted by the reality of the facts as D. Victorino had no experience or financial knowledge.
Regarding the obligation of information of the bank, the burden of proving compliance corresponds to the bank.
The Purchase Orders It lacks any kind of relevant information on the nature and risks of the product. The summary of the terms of the issue of necessarily convertible subordinated bonds exchangeable for shares of Banco Popular is complex and difficult to understand. The same goes for the documentation of the exchange in May 2012 (also applied the doctrine of propagation inefficiency associated contractual business).
In the placement of the Bonds, The meeting lasted less than 15 minutes, insufficient time to properly explain the product.
The "Disclaimers" are null pues el artículo 89.1 the TRLGDCYU regarded as unfair terms "Statements of reception or under fictitious events".
The breach of duties of information leads to the presumption that there has been error in the consent (STS 20 January 2014).
As for the trade in May 2012, Banco Popular also credited fulfilled its reporting obligations at that time. And they must apply the jurisprudence of spread of ineffectiveness related to later business (SSTS 22 December 2009 and 17 June 2010).
When declared invalid subscription, entails the nullity of exchange.
The fact that the product will work for a while and that the client receive the returns on their accounts, estoppel does not constitute or not a validation of business, or who knew the nature and characteristics of the Bonds of Banco Popular. The estoppel (STS 28 September and 2009):
"Budget is to be valid and effective Law, so no action on their complaint when they are vitiated by errors, since knowledge is notoriously inconsistent with the manifest intent required "
Ultimately, Banco Popular's appeal is dismissed, and the judgment of the first instance annulled the purchase of convertible bonds of Banco Popular and its subsequent exchange is confirmed, and orders the mutual surrender of benefits, together with costs to the bank.
The 25 November 2015, this issue of the People's Bank Bonds will become mandatory in actions, with heavy losses for customers. Complaining after this date can weaken the chances of success.