By decision of the resolution authorities (Single Resolution Board -SRB- and FROB) the entity’s shares have been written off at zero value, meaning that the shareholders lose all the money invested. The operation has consisted of a reduction of the share capital to zero euros, through the amortization of all the shares of Banco Popular, as well as the conversion of the convertible bonds and the subordinated debt into shares, acquired in turn at the indicated symbolic price for the Santander.
What legal measures can be taken?
It is worth asking what legal actions affected shareholders can take.
Those who attended Banco Popular’s capital increase in June 2016, if they prove that the prospectus did not reflect the true image of the bank, can claim the loss suffered.
Aside from the above, the shareholders have several legal actions in civil proceedings to defend their position, directed against Banco Popular, and without prejudice to the criminal actions that could also be filed, if applicable, against the entity itself as well. as against his former managers for their mismanagement.
Those affected could initiate the actions provided for in the Civil Code, for annulability due to a defect in the consent given by mistake, or due to fraud, derived from falsehoods, omissions of relevant information, or misleading statements offered by the entity itself.
Shareholders who have acquired their securities on the occasion of the last capital increase, in June 2016, article 38 of the consolidated text of the Securities Market Law, establishes the responsibility of the issuer, the offeror and the administrators, as well as of the guarantor and the entity managing the issue, for the information contained in the prospectus, in the event that damages are caused to the holders of the securities acquired as a result of false information or omissions of relevant data in the prospectus.
If the purchase of shares was made on the advice of the entity itself, said purchase could be attacked due to poor advice on the part of the banking entity, and it must be proven that it was the entity itself or its employees who recommended the purchase of shares.
At the same time, in addition to the actions described, the decisions adopted by the Single Resolution Board, the body that validated the purchase operation, could be challenged, although in this case, the action must be brought before the Court of Luxembourg.
The liquidation of the Bank having also been ratified by the FROB, said decision is also susceptible to challenge, with the National Court being the competent body.
The different actions have different procedural and temporal requirements, so the most advisable thing would be to carry out a detailed study of the real viability of the possible actions, for which our Firm has specialists in the matter.