Investment funds: Malpractice

fondos de inversion

Although mutual funds are "non complex", for the purposes of LMV, not thereby be rid of some irregular practices, to the detriment of customers.

In fact last 10 November, the National Securities Market Commission issued a report which we gave news en esta entrada, in which they highlighted some marketing practices investment funds "Unadjusted to the regulations" mainly related to the lack of adequate information and advertising that violates the provisions.

Moreover, in some cases they have been detected irregular practices in the following specific cases:

  • Application of higher commissions to be agreed.
  • Investment of cash in money funds the bank with higher commissions.
  • Fee costs do not correspond to effective service.
  • Failure to meet deadlines in orders to buy or sell.
  • Application securities settlement does not correspond to the date of execution.

There are even some cases of fund buying exist without the order by the customer.

This situation has recently been resolved in a Sentencia de la Audiencia Provincial de Madrid de 30 September 2015.

Ms.. Delia was a client of Caixa de Ahorros de Catalunya and had signed various funds and financial products. It did not closely monitor their accounts and investments but earlier 2009 It found that in April 2006 there had been two movements 90.000 euros. When you ask the bank indicated that they had signed two investment funds: "Dynamic Safety Catalonia 2 F1 "and" Cash Balance Catalonia 2 F1”. After claiming the bank, Ms.. Delia sells both funds incur losses. He complained to the CNMV, whose opinion was favorable to the client.

The company offered financial compensation, but considering it insufficient, Ms.. Delia interpuso lawsuit against Savings Bank of Catalonia (Now Catalunya Bank S.A.), to claim for damages suffered.

The bank claimed that the action would be required and that the funds were provided by the director of the office and that the applicant consented.

The Court of 1st Instance No. 14 of Madrid upheld the claim and he ordered the bank to pay 21.568 euros for the loss of background "Dynamic Safety Catalonia 2 F1 "and 9.237 euros for the loss of background "Cash Balance Catalonia 2 F1”. He considered that such subscribed investment funds without the consent of the applicant and rejected the prescription applied within 15 year-contractual liability. No consta que el banco siguiese instrucciones de la demandante ni que se informase sobre dichos investment funds.

The bank appealed this ruling on appeal.
Statute of limitations for claims under Article 945 Commercial Code.

Article 945
Responsibility for stockbrokers, brokers or interpreters ships, the obligations involved by virtue of office, barred three years.

He also says that the contract between the parties was justified by freedom of shape and, It is significant amounts, it is unlikely that the plaintiff's desconociese without having given their express or tacit consent. The estoppel and the tacit compliance with bank notes apply.

To the Provincial Court, no requirement for that It is an action for contractual liability and the deadline is 15 Item years 1964 Civil Code. Article does not apply 945 Commercial Code.

The contractual relationship with the bank, It would operate under a discretionary portfolio management, to which Article 63.1d of the LMV refers. Article 79 It requires the financial institution act with diligence and transparency in customer interest, develop an orderly and prudent management, looking after the interests of customers as if they were their own and make sure they have all the necessary information about their customers, always keeping them properly informed.
This rule implements Directive 1993/22 / EEC 10 May. Also to be taken into account Directive 2994/39 / EC 21 April to interpret the obligations of the financial institution, but still it was not transposed.

Moreover, the Royal Decree 629/1993 establishing rules of conduct for financial institutions (article 5 Annex).

They also apply the orders of the Ministry of Economy and Finance 25 October 1995 and 7 October 1999.

Which the contract is completed before the MIFID, does not absolve the defendant of the obligation to provide accurate information to understand the nature of the product that hires and ensure that it has understood clearly enough in advance to subscribe (STS 30 June 2015 and STS 20 January 2014).

The report issued by the CNMV on the case in September 2010 indicates "Caixa Catalunya has not acted with due diligence and / or transparency in client interest (…) when you make a subscription of securities without your consent ".

Ultimately, considers that such infringement has occurred to the plaintiff damages indicated by signing the investment funds, bringing the appeal is dismissed and the conviction to the bank, with imposition of costs.

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