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Stung Bankia Investors Look To Courts For Justice
 

Stung Bankia Investors Look To Courts For Justice

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    Stung Bankia Investors Look To Courts For Justice Stung Bankia Investors Look To Courts For Justice Document Transcript

    • Stung Bankia Investors Look To Courts For Justice[US Market News] TradingReview360.com: We search to bring you the very latest news fromaround the globe. The article below is sourced from the latest US Market News.Read on to find out more:MADRID (Reuters) – Spanish savers and pensioners who have seen their money wiped out byinvesting in state-rescued lender Bankia are likely to seek redress in court rather than wait forany official inquiry, which looks increasingly unlikely. About 350,000 stockholders will share the pain of the bank’s European bailout, many of thembank clients who were sold the shares through an aggressive marketing campaign for its stockmarket flotation in 2011. Shares in the lender, rescued by the state in May in Spain‘s biggest ever bank bailout, fell torecord lows on Friday, tumbling over 40 percent from the start of the week after it emergedlosses on bad loans were worse than expected. “Going to the courts and seeing if a judge can bring us justice is the only path left to us,”said Maricarmen Olivares, whose parents lost 600,000 euros ($793,300) they made from sellingher father’s car workshop by investing in Bankia preference shares. Neither of the two main political parties want to push for a full investigation into Bankia’sdemise, which could draw attention to their own role in a debacle that has driven Spain to thebrink of an international rescue, commentators say. “Investigations work when a political party has something to gain over another. In this case,no-one has anything to gain,” said Juan Carlos Rodriguez, of consultancy Analistas SocioPoliticos. “I don’t see the big parties investigating this because if there have been errors committed,they have been committed by both sides.” The Socialist Party was in power when Bankia was formed in 2010 from an ill-matchedcombination of seven regional savings banks, a union that concentrated an unsustainableexposure to Spain’s collapsed property sector. Immense political pressure from the then government forced Bankia executives to push aheadwith an initial public offering in July 2011 as Spain sought to bring private capital into its bankingsystem and avoid a European bailout. Then chairman, Rodrigo Rato, a former chief of the International Monetary Fund, had stronglinks to the centre-right Popular Party (PP) and was finance minister in a previous PPadministration. 1/4
    • A small political party, UPyD, forced the High Court in July to open an investigation intowhether Rato, ousted when the bank was nationalized in May, and 32 other former boardmembers are guilty of fraud, price-fixing or falsifying accounts. Investigating magistrate Fernando Andreu has so far not brought charges against anyone andcould still drop the case. “WE WON’T SEE OUR MONEY AGAIN” Rato appeared in a private session before the judge on December 20 where he denied anyblame for what happened. Rato, who cannot legally speak to the press because he is the subject of a court investigation,has kept a low profile since the bank rescue in May. Protesters gathered outside the court onthe day of his declaration wearing masks of his face. The probe centres around Bankia’s stock market listing, the formation of the lender from theseven savings banks and the gaping capital shortfall revealed at the bank after the statetakeover in May. Rato and 23 others including bank executives and cabinet ministers were called to testifybefore a parliamentary committee in July this year where Rato said he had a clear conscienceand had done things properly. “That was just window-dressing by the PP following the outcry over the Bankia disaster,” saida Socialist Party source. The opposition Socialists called for a full parliamentary investigation in May, but the ruling PPblocked it, the Socialist Party source said. A PP spokeswoman said any investigation of Bankiashould be carried out through the courts, not the government. A government source said any investigative process would not fall to the government, but tothe courts. Bankia, alongside other Spanish banks, sold billions of euros of preference shares andsubordinated debt to high street clients, many of whom say they were tricked into parting withtheir savings and are seeking compensation. The investigating magistrate is not including the mis-selling of preference shares – hybridinstruments that fall between a share and a bond – in the probe. Holders of preference shares at Bankia will incur losses of up to 46 percent as part of theEuropean bailout, receiving shares rather than cash in exchange. “We won’t see our money again, that’s for sure. They’ll give us shares, but shares with novalue or credibility in a nationalized bank,” said Olivares, who said she had heard nothing from 2/4
    • the bank as to how much their losses would be. The losses each investor will have to take has yet to be decided, a Bankia spokesman said,adding that hybrid debtholders at all rescued banks had to take losses, not just at Bankia. A source close to the court investigation said there would certainly be scope for a separatewider probe into the mis-selling of preference shares, not just at Bankia, but throughout Spain’ssavings banks. Olivares, like many other small savers at Spain’s state-rescued banks, claims her parentswere sold the preference shares as a kind of high-interest savings account and that the bankstaff did not explain the risks attached. The government is in the process of setting up an arbitration process to compensate Bankiaclients who can prove that they were duped into buying preference shares, Economy MinisterLuis de Guindos said last week. But many ordinary Spaniards who lost their life savings through the Bankia rescue say this isnot enough and they want answers as to what happened to their money. “We want justice, at least some kind of recognition that we were swindled,” said RaimundoGuillen, a 50-year-old electricity station worker who put 30,000 euros in preference shares withBankia under the impression they were a form of savings account. “It’s as if they’ve stolen your wallet – blatantly, with their face uncovered.” ($1 = 0.7564 euros) (Reporting By Sonya Dowsett; Editing by Will Waterman)Check out the original source here.We hope that you felt the above article was of value. Please feel free to share this article.Staying on par with the Market News from around the globe is essential for investors andtraders alike. Whether it is political, financial or social modifications which can affect yourfinancial investments in the short, medium or long term, it’s good to be in the understand.We aspire to bring you the most up to date news as it breaks, so you in front of the majority ofinvestors and traders . 3/4
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