In this blog we have referred on several occasions to the jurisprudence of our courts on litigation for the commercialization of complex financial products and we have drawn attention to the desirability of not generalizing the impression that banks are always condemned and clients They always consider their claims of nullity or resolution of the contracts of acquisition of those complex values and of the consequent responsibility of the defendant banks. This is because, although it is true that most of the Judgments – both of the First Chamber of the Civil Court of the Supreme Court and the Provincial Hearings – are estimates of those claims, you must be in the circumstances of each case to verify the final solution.
In this sense, the following entries of this blog can be consulted:
07.09.2015: “The Supreme Court ruled on several cases of commercialization of complex financial products by banks. A method of early diagnosis. “
30.09.2015. “New Supreme Court rulings on the commercialization of complex financial products by banks. A test of the usefulness of our method of early diagnosis. “
13.11.2015: “Recent jurisprudence on the commercialization of securities by banks. One more warning against generalization. Further proof of the usefulness of the early diagnosis method. “
Well, once again, we see how the First Civil Chamber of the Supreme Court pronounces on the commercialization by banks of complex financial products in its Judgment no. 489/2015 of 16 September (RJ 2015/5013), which establishes the claim of nullity of a contract for the acquisition of securities issued by an Icelandic bank – which were equivalent to preferred shares – exercised by a client against the commercialization bank, The condemnation to the latter to the payment of the amounts provided, with their legal interests.
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And this Judgment seems particularly interesting for both procedural reasons , since – in estimating the extraordinary appeal for procedural infringement – it assumes the instance to revoke the Judgment of the Provincial Court and to reinstate what was ruled by the Court of First Instance; As for substantial reasons , because it ratifies some basic criteria for the resolution of this type of litigation.
The assumption of fact is as follows: a client of a bank (retired lady who, at the time of hiring, was 76 years old and had previously invested in other products of similar risk level, a circumstance alleged by the bank defendant and not estimated As relevant by the Supreme Court) gives a purchase order of preferred shares issued by an Icelandic bank on January 4, 2007 for € 57,464.68. This investment suffered the loss resulting from the rescue of the bank issuing the acquired shares.
The legal conflictIs born when the customer files a complaint against the Spanish commercialization bank requesting that the purchase order of the shares be declared null and void on their consent or, in the alternative, the bank’s liability for negligent action and claiming that the latter acted as a marketer, Adviser and depositary of the securities acquired. The Judgment of the Court of First Instance considered the claim, which decision was revoked by the Judgment of the Provincial Court that, therefore, dismissed the claim. And this last Judgment was annulled by that of the First Civil Chamber of the Supreme Court no. 489/2015 of September 16, to which we refer in this entry for the reasons given below. The end result of the process is, therefore,
The basic criteria ratified by the First Civil Chamber of the Supreme Court in the Judgment that we comment on can be stated according to the following reasoning:
1 st. The burden of proof on the appropriate information to the client regarding the nature and risks of the complex financial product marketed depends on the commercial financial entity in such a way that says the Judgment:
“The lack of evidence on the existence of such information cannot be detrimental to the client, but to the investment services company, because these are extremes which, in accordance with the rules applicable to the claim, undermine the legal effectiveness of the alleged facts By the applicant and which were duly justified, and are extremes whose evidence is also at the full disposal of the defendant, if such information had actually been provided . “
2º. The initial moment to compute the period of 4 years to exercise the nullity of contracts because of the lack of consent begins to compute – when it comes to contracts for the commercialization of complex financial products – it is not the time to conclude the contract, but it is The moment in which the client has acquired the awareness of the error by the real understanding of the characteristics and risks of the acquired financial product, in such a way that the Judgment says:
“Applying the doctrine contained in this judgment and taking into account that the applicant was not aware of the determinants of the error at least until, in October 2008, the intervention of the Icelandic bank whose preferred shares had acquired, Had expired when it was exercised in December 2011 “.
3º. Banks must provide complete and adequate information on the characteristics and risks of the complex financial product they market in such a way that the Judgment says:
“The consequence of the above is that clear, accurate, accurate and sufficient information about the investment product or service and its risks must be provided by the investment services company to the potential non-professional client when promoting or offering the service or Product, well in advance of the moment the consent is issued, so that it can be properly formed. (…) This requirement is not fulfilled when such information has been omitted in the offer or advice to the customer in relation to such service or product, and in this case there was advice, while the customer purchased the product because it was offered by the Employee of Bankinter. In order to provide advice, it is not essential that there be an ad hoc contract for the provision of such advice, As seems to understand the sentence of the Provincial Court, remunerated, as the appellant claims, or that this investment fell within a portfolio management contract signed by the applicant and Bankinter. It is enough that the initiative departs from the investment company, which is the one that offers the product to its client recommending its acquisition. (…) In this case, there is no evidence that such prior information was available, and not even the information contained in the purchase order provided by Bankinter, which was the document submitted to the applicant for signature, was adequate, since The nature of the product acquired was not explained, the issuer of the preferred shares was not adequately identified, the data contained contained misleading or less equivocal information,
In conclusion, this Judgment of the First Civil Chamber of the Supreme Court No. 489/15, of September 16, which ratifies the doctrine by other precedents of the Plenum of the Chamber that quoted us, leads to insist on the utility of the model of diagnosis Which we have sponsored for some time and which is based on answering the following three questions: First, what type of financial instrument has been marketed and what degree of complexity does it present; Second, what type of investor or client demands the intermediary bank ?; And, third, What type of investment service links the parties? Because the more complex the product commercialized, the less professional the applicant is and the more intense the service provided by the marketing bank; There are greater possibilities of condemnation of the latter.