Subordinated bonds

Banco Popular sold complex financial products to small investors as bonds that were mandatorily convertible in stocks, bonds that were contingently convertible to stocks (CoCos) and subordinated debt, for an amount over 2.000 million euros. All these products were offered as safe, risk free products, when they weren’t.

Reclaim your normal and subordinated Banco Popular bonds. 99% success rate.

Those who bought them have seen their portfolio disappear due to the resolution of the bank. If you’re a small investor, be it a person or a company, you can claim the anullment of your contract and the restoration of your investment. The courts side with us.

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What has happened?

In the same way that other banks have done during recent years, Banco Popular emitted and sold complex financial products such as bonds that were mandatorily convertible in stocks, bonds that were contingently convertible in stocks (CoCoS) and subordinated debt to small investors for over 2.000 million euros in an urgent bid to recapitalize.

The Banco Popular bonds that were mandatorily or contingetly convertible in stocks, and the subordinated debt, constitute complex and risky financial investment products that, with the bait of a good initial profitability, involve risks related to the proper randomness of the stock market.

These debt titles were offered as secure, risk free products, intentionally obscuring the true characteristics of the products and their end. With the resolution of the 22nd of July of 2016, the CNMV fined Banco Popular for a very severe infraction, for having not met their information obligations, conflicts of interest and transparency in the moment of the comercialization to small investors of these types of complex financial products between January 2009 and November 2011.

The previsions of improvement that Banco Popular made didn’t come true, and the course of time made their situation worse, leaving the main affected parties as the clients themselves: They suffered devaluations of their investments of around 70%, being pushed by the bank to make multiple convertions of bonds or accept offers to rebuy stocks in the case of subordinated bonds that were mandatorily convertible.

Additionally, the full amount of the debts were converted to new emission stocks by Banco Popular on the 6th of July 2017, under the mark of the resolution order by the JUR. After the purchase by Banco Santander of Banco Popular for the symbolic price of 1€, the losses represent 100% of the investment.

What is the solution for the stockholders affected by Banco Popular?

Although an out of court negotiation can be attempted with the bank, until now there are no signs that they’re willing to reach any type of agreement. The solution is to present a claim via the courts. The claim is based on lack of consent due to the product having been sold under the fake appearence of a fixed income.
For this, it’s vital to value in each case:

  • The investor’s profile,
  • Their experience in contracting this type of product or products with similar characteristics,
  • The relationship that exists between the bank and the client,
  • The documentation and information provided at the moment of the contracting.
Can I claim as someone affected by bonds and subordinated debt from Banco Popular?

Yes, it’s possible to claim for the anullment of the contract and the consequential restititution of the invested amounts as long as it’s a small investor who hasn’t been correctly informed of the characteristics of the products, specially of their risks.
Also, you can claim if the investment has been done by a company, as long as it’s a retail cliente, ergo a company that isn’t dedicated to investment or isn’t a large company that meets 2 of the following 3 requirements, defined in article 78 bis 3.c) of the Stock Market Law (LMV):

  1. That total assets is equal to or greater than 20 million euros.
  2. That the anual business amount is equal or greater than 40 million euros.
  3. That it’s capital funds are equal or greater than 2 million euros.

The courts side with us. The recent sentence from the 17th of June 2016 from the Supreme Court declares the nullity of a convertible bonds contract, condemning the bank to return the invested amounts plus legal interest along with the payment of legal costs.

Frequently asked
questions

What can I achieve with my claim?

If your claim succeeds, you’ll recover the lost money with the corresponding legal interest, discounting the perceived returns and their respective interests.

Civil or penal claim?

Although in certain cases there could be a basis for a penal claim, we recommend that the claim be in the civil court, which is the quickest and safest way to recover the investment.

Individual or collective claim?

Our recommendation is to claim individually. Collective claims can even not be processed by the court.

Who do we claim against?

For the time being, and while Banco Santander doesn’t have a defined juridical figure of integration after the acquisition of Banco Popular, the claim against the emitor and seller of the product, this is, Banco Popular.

What time frame do I have?

Each case must be studied individually, however in accordance to the most recent doctrins it must be claimed in the 4 following years since knowledge could have been had about the true characteristics of the acquired product. In any case, the most restrictive period would begin counting from the moment of the conversion of bonds or obligations in stocks.

How long does the claim take?

According to the Judicial Statistics Service, a procedure like this can take approximately 9 months in First Instance, and, if appealed, could take another 5 months on top of that.

I've converted the bonds before the mandatory conversion date, can I claim?

Each individual case can be studied, and in most cases the voluntary conversion was cause by the actual bank in an attempt to recover the investment in an inmediate manner.

What arguments do the bank use?

The bank tends to defend themselves arguing that the sale of the product was correct from two perspective: (i) that all the sales formalities that the MIFID requires for this type of products were met and (ii) that the clients were correctly informed of the risks and therefore knew the risks and still decided to contract the product.

Where is the claim presented?

The claim is presented in the First Instance Court corresponding to the office where the contract was subscribed.

What are the chances of winning?

Our experience in these cases leads us to confirm that the success rate is high. The Supreme Court in it’s 17th of June 2016 sentence acknowledged not only the complex nature of these products, but also the risk that they involve for the buyers, which forces the financial entity that sells them to provide the investor with specially careful information.

I'm a company or have advanced education, does that affect the chances of success?

Of course the investment history, formation and profession have an effect on the chances of success, but in general the court mandates that the bank must prove that it correctly informed the client of the product and we base our claim on this argument.

Once won, how long does it take to get paid? What does that depend on?

When a sentence is won we must wait a month for it to be firm. After that, the bank has another month to voluntarily deposit the money. If they do, we must request that the Justice Administration hand us the money via a payment order. This can take another month. If the bank doesn’t pay voluntarily, we must present an enforcement claim, which can take another four months.

What's the worse case scenario if we lose?

The worse case is to lose the case and to be forced to pay legal costs. Legal costs will be a maximum of 1/3 of the claimed amount.

If the owner passes, can their heirs claim?

Yes, there are a multitude of cases of this nature that are processed and, proving the right to the estate, won. Any heir can act on behalf of the estate and process the claim, although it’s recommended it be done by a majority of representatives of the estate if it’s still not been handed out.

We're a couple married in gained goods regime, must we both claim?

If the two members of the marriage are co-owners of the bonds, both parties must present the claim.

Why claim with RD Asesores?

Because we win.

Because we know how to recover your money, our results back that up.
Because you’ll receive a personalized treatment, you won’t be one of thousands of clients.
Because your claim will be presented in two weeks and you won’t wait months.
Because our tariffs are very competitive, we only get paid if you do.
And because we offer all of this with a high degree of quality and professionalism.

What documentation do I need?
  • Professional order sheet
  • Power of Attorney
  • Summary of the emission
  • General conditions of investment services
  • Convenience test
  • Document classifying the type of investor
  • Declaration of receipt of documents and information
  • Purchase order
  • Provisional purchase order
  • Information about financial products offered by the Banco Popular group.
  • Extract that credits the exchange for another emission (if one exists).
  • Extract that credits the exchange for stocks (if one exists).
  • Extract that credits the sale of the stocks (if one exists).
  • There could be other documents that substitute one or multiple of the above, but it must be the lawyer who decides that.

Fees

How much does it cost?
  • Without provision of funds, we only charge if the claim is succesful and at the end of the work.
  • In the case that you recover your money, 10% of the amount recovered + IVA.
  • In the case that the bank is convicted to pay legal costs, all of the legal costs + 10% + IVA of the amount recovered.
What are the legal costs?

It’s an amount of money that’s quantified by the court, depending on the claim amount, to cover the costs of the lawyer and the solicitor that the winner has had to pay.

When is a conviction in legal costs?

The conviction in legal costs is when the judge sides completely with the winning party of the trial

Can I be convicted to pay legal costs?

It’s unlikely for this to happen. It would be the worse case scenario.

What services do these rates include?
  • Lawyer services:
    • Complete processing of the claim, in or out of court, in all instances up until the Supreme Court, including enforcement costs.
    • Telephone and email attention, along with in person service to prepare the trial if necessary.
  • Solicitor services:
    • Complete processing in all instances.
Other costs

Power of attorney

It’s a document that’s signed in front of a notary and that empowers the lawyer and solicitor that will represent you in court.
This document can be signed in any notary office in Spain and tends to be handed to you in the moment and without appointment. It has an approximate cost of 50 €.
We have a model at your disposal that you can take to your notary or we can indicate to you the various notaries RD Asesores work with.

Rates

Only companies are obliged to pay court rates. The amount is calculated over a fixed 300 € for amount over 6.000 € and 150 € for claims under 6.000 €, in both cases, plus 0,5% of the amount claimed, as long as your claim is over 2.000 €.

Additional Costs

  • The costs of getting to the location where the services are contracted, telephone calls and photocopies are included.
  • What isn’t included is the mandatory deposit (between 25 € and 50 €) and the delivery of certified post, messengers and burofax, which the client will have to pay.
  • Before incurring in any extraordinary cost in the processing of the case, the client will be consulted and will have to agree to the cost.

You can call us on

952 217 346

We’re at

Plaza Uncibay, 8, 2nd floor, Málaga

Leave your questions and our team will reply.