Acciones Banco Popular: Data expansion 2016 They were not real

Banco Popular

The Provincial Court of Asturias confirms that economic data provided in the capital of Banco Popular were not real and confirms the invalidity of a share subscription agreement for a particular

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The legislation imposes the obligation is fulfilled by the publication of a prospectus prepared by the issuer. This brochure, the future investor must obtain a thorough knowledge of the circumstances to reasonably decide. Not enough brochure, but that information should allow the investor to know the economic reality of the company offering its shares.

7th Section of the Provincial Court of Asturias, in Case 28 June 2019 He resolved in favor of consumers. The customer bought shares of Banco Popular expanding 2016 amounting to 7.783,75 euros. The information that was provided to make the decision did not reflect the actual financial position of the entity.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

The 20 June 2016 D. Ignacio signed a share purchase contract by price 7.783,75 euros in the capital increase of Banco Popular Spanish S.A.

The 10 April 2017 the bank said it would not pay dividends that may be required capital or a corporate sale. Finally, It was concluded that Banco Popular was not feasible so the intervention by Hur and transmission of the entity to Banco Santander was by value 1 euro.

Investors who had bought shares of Banco Popular in expanding 2016 they lost all their capital amortized worth “0” euros.

D. Ignacio filed suit against the bank. He claimed the concurrence of essential and excusable error to acquire shares. And this based on the publicized financial information by the entity, as this He did not correspond with their actual financial situation. So that si D. Ignacio had known this, I had not checked your purchase.

Primera Instancia

The 2 November 2018 the Court of First Instance No.,,es,of Almería dictated auto initiating the phase of liquidation of Construcciones Nativen S.L,,es,the insured initiated payment proceeding against the insurer in the amount of € 161,086.24,,es,the insured filed ordinary lawsuit for the same amount against the insurer,,es,who opposed, alleging the prescription of the action brought against him,,es,de Madrid ruled in favor of the insurer. & nbsp; The judge understood the action prescribed based on the art,,es,LCS that establishes a term of two years,,es,The dies a quo would be the,,es,two years after MELV was able to take action against the debtor,,es,The claim filed,,es,the action was prescribed,,es. 7 de Gijón, dicto decision upholding in full demand.

He declared invalidity of the purchase of shares of Banco Popular. He condemned the parties to the consequent reciprocal recovery of benefits:  shares purchased with fruit and the price paid plus their legal interests.

Provincial Court

Instance judgment against, BANCO SANTANDER appealed.

The appellant alleged error in the assessment of the evidence practiced on the veracity of the accounts of the entity. It had an impact on the audit report conducted by the PWC commercial. He concluded in his letter that there was no excusable error appreciate essential and the acquisition by the actor stressing that his performance "was transparent, at all times, with shareholders ".

The 28 June 2019 7th Section of the Provincial Court of Asturias gave judgment dismissing the appeal and confirmed the judgment of the first instance.

Hearing the question focused on deciding whether the information offered by Banco Popular on the decision of capital was a true reflection of their economic situation and finance. So that "the future investor ... could get a thorough knowledge of these circumstances when deciding to invest and not a misrepresentation of reality, knowing that she would not have carried out.

The product signed by the actor "actions" It was not a complex product. So good, this does not absolve, ni minimiza, duty weighing on the bank of "provide sufficient information, accurate and updated on the terms of the offer and the securities offered, de modo que allows the investor to decide to purchase or subscription, as determined in the art. 35 of the Consolidated Law on the Securities Market " (TRLMV).

The legislation imposes a specific duty of disclosure by means of the publication of a prospectus made by the issuer. This pamphlet should be brought to a public authority for approval and registration as Essential requirements. Indispensable requirements for public subscription offer.

Content prospectus It is established in the art. 37 TRLMV, in line with Directive 2003/71 the European Parliament and the Council 4 November 2003. Should contain "information about the risks of the issuer, assets and liabilities, financial situation, Benefits, losses and prospects of the issuer ".

The Court cited its resource 616/2018, in which it was determined that in the prospectus should consist, really, the main issuer risk. So good, in the prospectus issued by Banco Popular they said obligations are not cumplimentaban.

Specifically, informative advertising in the entity showed its decision to increase the share capital of the Bank as that "the capital increase was primarily intended to strengthen the balance sheet of Banco Popular and improve their rates of return ... ... solvency and asset quality; ... it will reinforce its strong franchise and business model ... that after the Capital Increase, Banco Popular will have a better margin for maneuver ... Popular Bank currently intends to resume dividend payments ... Popular Bank has determined target a payout ratio of cash dividend of at least 40% 2018. "

The content of an image that had nothing to do with what happened after the capital increase for the year 2016 was clear the weakness of their financial situation intervention and absorption by Banco Santander became necessary so Banco Popular had disappeared or gone into a situation of bankruptcy, leading to its liquidation.

The expert said the actor "the financial information provided in the brochure capital increase was manipulated and was part, without that meets the requirement of relevance, namely, recognizable, clear and comparable, and it was not useful or reliable, for being biased for decision-making”.

With the brochure a misrepresentation of the equity and financial information and the ability to profit aired Bank.

Reproached recurrent entity in its application that would not have taken into account the audit report by PWC. Report on the reliability of the audited financial economic information; reliability, Hearing determined, “It does not have the character which aims to grant the appellant, since this does not imply that the annual accounts can not be revised afterwards ... ".

So, it was publicly known that the audit was sanctioned by the People's Bank Accounts 2012 and, opening of disciplinary proceedings for accounts 2016.

Such proposed by the Director of Financial Reporting and Corporate and CEO of Markets CNMV disciplinary proceedings, He is corroborating the findings of expert reports Actor. Specifically, in order that financial and accounting information provided by the People's Bank did not reflect the true situation of the entity on the date on which occurred the capital in 2016 ".

The Court stated that it shared the conclusion reached by Judge Instance.

Therefore, no record established that in the course of marketing producer will provide the actor "specific and accurate information about the risks of investing, nor about the crisis he was going through the Bank.”

 “Economic data included in the prospectus were not real, nor they correspond to the true financial position of the Bank by failing essential data on actual profits and losses of the entity…”.

D. Ignacio, “at the time of recruitment, lacked reliable information on the creditworthiness and prospects of the issuer, de modo que, had only favorable information publicized leading to a misrepresentation of the actual financial situation was going through the issuing bank.

It was logical that the actor trust information compiled by the issuer and has been subject to supervision and control by a public body regulating the Stock Market. So that, Having known by other means, the true situation of the Bank, He would not have decided to invest.

Therefore, It was obvious concurrence of vitiated consent actor when acquiring the shares and that was decisive for the annulment of the contract.

The Court cited the STS 23/2016, of 3 February, by which "if in the process of listing shares information about the issuer and own shares is an essential requirement to be met by the prospectus regulated in the arts. 26 ff. of the SMA and 16 ff. of RD 1310/2005 of 4 November, such information is the key element that the small investor ... future at its disposal to assess the assets and liabilities of the issuer, your financial situation, profit and loss, and prospects of the issuer and the rights attached to these actions.

The decisive factor was that the acquirers of the shares offered by the Bank were "a misrepresentation of the solvency of the entity and, consequently, the possible return on investment, and they find that they have actually acquired an entity values ​​the edge of insolvency ... hence its excusable error in the subscription of shares…”.

So, instance judgment clearly picked causation:

1º) The brochure advertised a situation of solvency and existence of benefits that were not real;

2º) Such economic data was essential for the investor could make its decision ...

3º) The investment objective was to obtain performance, so the public communication about benefits millionaires proved decisive in the acquisition and delivery of consent.

4º) The error becomes apparent excusability, as that information is made by the issuer with an authorization process brochure and hence viability of the public offering supervised by a public body, generating confidence and legal certainty in the small investor ".

Accordingly, It was obvious that, if they had known the real value of the shares they were buying, they have not acquired under any circumstances. Especially when dealing with small savers who only had the information supplied by the entity itself. Unlike large investors, if they could access other supplementary information.

Therefore the Court dismissed the appeal filed by the bank. He confirmed the first instance judgment in its entirety.

Conclusion

Financial institutions are obliged to provide the consumer, by prospectus, sufficient information, accurate and updated information on the terms of offers and securities offering. Investor to properly assess the risks of the operation. The deadline for requesting the cancellation for lack of consent on the acquisition of shares of Banco Popular in expanding 2016 ending June 2020.

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