Structured Bonds: Confirmada nulidad en Mallorca

structured bonds

Structured bonds declared void due to lack of information in Mallorca.

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The Provincial Court of Mallorca has confirmed the cancellation of a subscription of “French Banks Structured Bonds “marketed by Barclays S.A. (ahora Caixabank S.A.) to his clients, for not providing sufficient information about its nature and risks.

The decision has been adopted in the judgment of the Provincial Court of Mallorca No. 81/2017, of 07 March 2017.

The 18 June 2007, Ms.. Violet, who acted as a consumer and had no financial expertise, subscribed the structured bond “Bon Autcan BCO Franceses II” offered by Barclays S.A. por un importe total de 65.000 €.

Arrival the expiration date, as a result of the decrease in the price of the securities to which the bond was linked, Ms.. Violeta lost most of the 65.000 invested €.

Understanding then that Barclays S.A. had not sufficiently informed him of the risks involved in subscribing to this structured bond, Ms.. Violeta filed a lawsuit requesting that her subscription order be annulled due to an error in consent., and that Barclays S.A be sentenced. to return the,,es,plus legal interest from the date of subscription,,es,estimated by the Court of First Instance Ollie #,,es,against which I appealed Banco Santander S.A.,,es,Include the following reasoning Audience,,es,Although the contract is completed before the entry into force of MiFID,,es,in the version in force at the time of recruitment and provided that,,es,entities acted in the stock market should ensure that they have all the necessary information about their customers and keep them always adequately informed,,es,The shipment from the bank card customers in the negative performance of the product is reflected irrelevant,,es 65.000 Initially invested €.

Dicha demanda fue fully estimated by the Court of First Instance No. 19 de Palma in his sentence 26 May 2016. Against that decision, and the embroidery, Barclays S.A. filed an appeal based on 1) lack of capacity to be sued; and 2) no error in consent.

Regarding lack of standing, Barclays S.A. claimed that, as she was not the station of the structured bond, but only the marketer of the same, lacked passive legitimation to support the action of annulment, and that in any case Ms. Violeta should also have sued the entity that issued the structured bond.

against it, the court of appeal concludes that the passive standing of Barclays S.A. drift, on the one hand, that Barclays S.A itself appeared on the subscription order for such structured bonds. as a signer and, on the other hand, that, actually, the role of intermediary of Barclays S.A. was more apparent than real, since the issuing entity of the product was Barclays Bank P.L.C., there is an evident link between both entities.

En cuanto a la inexistencia de error in the consent de Dª. Violet, Barclays Bank S.A. In its appeal, it alleged that the information provided to Ms. Violet was insufficient.

The Provincial Court, however, remember that insofar as structured bonds are complex financial products, the bank that markets it is obliged to provide its client, sufficiently prior to signing the contract, the necessary information on the nature and risks of the product offered, in accordance with the provisions of the Securities Market Law and the RD 629/1993 (applicable regulations before the transposition of the MiFID regulations).

In this case, the court concludes that the bank had not provided sufficient pre-contractual information on the nature and risks of the structured bond offered to Ms.. Violet. That breach, coupled with that GOD. Violet lacked specific financial training, generated that the consent given by it to subscribe the structured bonds was vitiated by essential error (because it fell on a fundamental element of the contract) y excusable (because it was the financial entity that had to avoid it).

Therefore, the Provincial Court dismisses the appeal filed by Barclays S.A. (Caixabank S.A., Now), y confirma la sentencia de primera instancia que la condenaba a devolver a Dª. Violet the 65.000 € initially invested in Structured Bonds, statutory interest.

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