Archives for Legal Action

Rothschild lawyers prepare for Court war

Rothschild Bank International Limited Logo

N.M. Rothschild & Sons has taken the legal defense of the Equity Release (ER) cases in Spain as a matter of life or death.

In a very generous interpretation of Spanish procedural laws that allow parties to bring those witnesses deemed useful in support of their arguments, the following individuals have been lined up for an up and coming Court hearing to take place in Denia:

  • Dean Murphy, former boss of Hamilton’s Financial Services, in charge of selling hundreds of fraudulent ER contracts. Currently based in La Cala de Mijas, Málaga.
  • Stephen Dewsnip, former manager Rothschild Bank International Limited that operated, knowingly, without a license in Spain. Currently living in West Sussex.
  • Peter Rose, former director at Rothschild Bank International Limited, currently living in Guernsey.
  • Claire Whittet, currently working for Rothschild Bank International Limited.
  • David Shannon, currently working for Rothschild Bank International Limited.

ERVA lawyers have cast doubt over the convenience -for Rothschild- of deposing those who explicitly extolled the false virtues of the Credit Select Mortgages, namely:

  • IHT-friendly.
  • Fully apt for risk-averse pensioners.
  • “Different” from a normal mortgage, as Rothschild would “not look to treating customers as regular borrowers”.

In all logic, those no longer under the umbrella of Rothschild will surely feel that being subjected to harsh cross-examination from the victims’ expert counsel, after moving on with their personal and professional lives, will be both stressful and unnecessary, unless of course their is some financial gain in it.

The Denia judge has the right to use his discretion to decide on the pertinence of Rothschild’s witness requests.

Landsbanki fails to transfer Equity Release cases to Luxembourg

Landbanki Luxembourg

It has been a while since our last post, but things have been fairly quiet in the litigation front, save for Landsbanki’s cases.

Undeterred by recent rotund judicial response against Equity Release contracts, liquidators for the Icelandic defunct financial predator remain undeterred and a still trying to collect their investments or, if needed, steal pensioners’ properties from under their feet.

For Landsbanki, cunning has become a second nature and consequently, their very latest devious strategy is to contest the jurisdiction of Spanish Courts in favour of the bank-friendly tribunals of Luxembourg, invoking EU-bankruptcy laws.

So far though, ERVA lawyers have managed to throw out no less than 8 motions filed by Landsbanki to have the cases relocated to Luxembourg Courts. The Courts involved are in the Malaga, Almeria and Alicante provinces.

2 further motions were accepted by the Courts but are likely to be reversed on appeal.

On finding in favour of the victims of the equity release fraud, the Courts upheld existing case law on the matter (two rulings of the Court of Appeal of Malaga of 2013 and 2015) as well as legal precepts invoked by the counsel of the victims.

Specifically, the Courts have convened that:

  • EU-bankruptcy laws do not apply to contracts signed by consumers, who still have the right to choose to litigate where they live.
  • EU-bankruptcy laws do not apply to legal agreements or contracts that were entered with the company prior to it becoming insolvent.
  • Spanish laws grant exclusive jurisdiction to national Courts where dispute over property registered rights is concerned.

 

 

Nykredit and Sydbank Cheated Foreigners with Mortgages Worth Millions

Oficina de Nykredit en Marbella

Two Danish Companies persuaded British property owners to take out mortgage loans they could not repay

Following the Appeal Court ruling against Nykredit and Sydbank where both defendants have been branded “clandestine operators” for operating without a license, Spanish national press have extensively covered this extraordinary story of fraud and deceipt. 

The following media have written about this deception:

 

BREAKING NEWS: Malaga Appeal Court Demolishes Nykredit & Sydbank’s Equity Release Mortgage

 

The Malaga Appeal Court has reversed an unjust Court of First Instance ruling and granted relief to two British pensioners victims of the “Spanish Equity Release Package” (SERP), peddled by Nykredit Realkredit A/S “and Sydbank (Schweiz) AG and sold by Offshore Money Managers.

The following is a summary of the ruling, received today:

  • Foreign pensioners were lured to Offshore Money Managers Equity Release proposal due to its attractive IHT reduction benefits.
  • Nykredit  and Sydbank associated themselves to produce the SERP.
  • Sydbank was not authorized to operate in Spain, in spite of which they opened -in contravention of mandatory laws- an office in Fuengirola.
  • Nykredit had no authorization by the Danish regulator to grant loans in Spain for investment purposes.
  • Chrystel Mark Hansen (mentioned twice) and Karen Egaa’s testimonies, on behalf of Nykredit, have been described as being extremely unreliable, when not openly untruthful.
  • Nykredit’s forensic expert’s conclusions are challenged extensively for being grossly biased in favour of the lender, besided deliberately ignoring fundamental aspects of contractual arrangements.
  • Nykredit’s mortgage loan is rendered null and void and Sydbank (Switzerland) is ordered to pay back 462,000 Euros to the claimants.

The Court findings represents a great disaster for both these banks because their conduct with existing clients is reported as irregular and dishonest, and to that effect imposed the maximum possible penalties in law.

(we will expand shortly)

Court Orders Stay on Nordea’s Foreclosure Proceedings

An Estepona Court has order an indefinite stay of proceedings in respect to a foreclosure case brought by Nordea against a Danish Equity Release victim.

Nordea’s aggressive stance was met with resistance from  lawyers acting for the customer, who invoked the abusiveness of the early maturity or redemption clauses and the pending resolution by the European Court of Justice, who will decide on their potential illegality.

 

 

CHANGE OF FORTUNES: BANKS SET TO LOSE MILLIONS WORTH OF EQUITY RELEASE CONTRACTS

Landbanki Luxembourg

A recent ruling by the Appeal Court of Bilbao -confirming an earlier ruling by the Court of First instance-is to set the ground for future cases on the so-called Equity Release mortgage loans.  Three Judges in the Basque High Court have ruled that banks -and by extension any other financial services company- that do not have a valid operating license will see their agreements declared null and void, be it mortgage loans, investment contracts or any other.

In late 2014, 20 pensioners (mostly British) bought an action to set aside 12 equity release mortgage loans -worth 6 million euros- against SLM, a Cheshire-based lender. The lender had not secured the mandatory regulatory license although they did warn they had no license to operate in Spain as, according to them, they were only providing lending for customers seeking to raise cash on their homes.

Now, the Bilbao Appeal Court has said the warning was no ‘mitigating’ factor because it misled the claimants into believing that the loan they were sold was financially secure when, in fact, most of it was invested via unregulated Isle of Man-based-dubious Premier-Group.

The relevance of the ruling, which brings an end to the suffering of the victims of this scam, is twofold: it nullifies contracts issued by unregulated companies and it fully endorses the allegations of the claimants that the widely publicized Inheritance Tax benefits were false, emphasizing that such conduct is deceitful and fraudulent.

It is believed that defunct Luxembourg-based Landsbanki Bank had lent a staggering 100 million euros in Spain to reduce death duties that thankfully will be difficult to recoup, whilst Rothschild Group could be set to lose 40 million Euros.

 

BILBAO APPEAL COURT UPHOLDS THE ILLEGALITY OF THE SLM MORTGAGES

Photograph: Registro Civil

The Appeal Court in Bilbao has upheld last year’s ruling by the Court of First Instance 11 in Bilbao and determined that  mortgage loans granted by Surrenda Link Mortgage (SLM) to invest with Premier Group should be declared null and void.

The appeal ruling confirms that operating without a license is a grave infringement of one mandatory regulatory framework of great importance: the financial services sector. As a result, they order the maximum possible sanction -nullity and voidness- to those illegal activities. For the Appeal Court, acting in this manner

deprived the claimants of any guarantees, which the current legislation envisages to ensure there is complete information with regards to the evolution and situation of the financial entities so that, in this respect, they can limit or prohibit those practices or deals that increase the risk of insolvency or lack of liquidity, and reinforce the resources required to attend to those risks, thus avoiding harm to applicants…Preamble of the Stock Exchange Act of 26/1988).

The Appeal Court goes further than the original ruling and fully corroborates and endorses the allegations of the claimants that the widely publicized Inheritance Tax benefits are false, emphasizing that such conduct is deceitful.

Finally, the higher Court reaffirms the allegation by the claimants that they had no financial experience, a fact not challenged by SLM.

SLM’s choices are to accept the ruling and not interfere in the cancellation of the mortgage loans or explore filing an exceptional appeal with the Supreme Court, a possibility only accepted in very specific cases.

Litigants expressed their satisfaction over the performance of their lawyers Lawbird Legal Services.

 

BREAKING NEWS: the BILBAO APPEAL COURT UPHOLDS THE ILLEGALITY OF THE SLM MORTGAGES

Audiencia de BizkaiaBREAKING NEWS

The Court of Appeal in Bilbao has dismissed totally the appeal launched by the SLM (Surrenda Link Mortgage) Madrid-based lawyers and upheld the first ruling of the Court of First Instance 11 in Bilbao.

SLM’s choices are to accept the ruling and not interfere in the cancellation of the mortgage loans or explore filing an exceptional appeal with the Supreme Court, a route only accepted in very specific cases.

More to follow in the next post.

Founder Member and President of ERVA celebrates Court victory over DANSKE BANK LUXEMBOURG S.A.

Image result for euan armstrong erva

Euan Armstrong, member founder and current President of ERVA, has managed to persuade a Court in Coin to dismiss loan foreclosure proceedings brought by Danske Bank International S.A. in 2010.

The victim of vicious luxembourg-based Danske Bank has fought relentlessly during 7 years to stop the lender from taking his home, after having been cheated by the bank’s staff -at one time based in Fuengirola- who sold him an Equity Release loan named as “Capital Assurance”.

In spite of being unsuccessful in 2 criminal actions, one directed to the bank’s representatives for aggravated fraud and a further one against a Coin-based Judge for negligence, the Superior Court of Justice in Granada -when dismissing the latter complaint against the Judge- deemed that Mr. Armstrong was nevertheless right in denouncing irregularities in the proceedings and observed that a fresh review of the case was necessary.

Finally, a newly-appointed Judge in Coin decided that Danske Bank’s position was untenable and threw the case out.

This ruling can be appealed (est. time 1.5 years to resolve) but it is unlikely it will be upheld.

Meanwhile, Euan is bringing new proceedings against Danske Bank International S.A. to nullify the Equity Release product and invalidate the mortgage loan.

Round Up of Equity Release Decisions

ERVA has compiled a list of known Equity Release Court rulings. The Courts have all found in favour of the victims and ordered the mortgage loans to be removed or have rendered the foreclosure proceedings invalid. In most, the Courts have opted to resolve the dispute by ordering a “restitution of benefits”, which means that each party should be returning what they took under the contract: the bank is made responsible to pay the interest and cover the investment losses, and the borrower is to return the sums paid to them at the outset.

In one case, the Court refused the bank the right to claim back the initial payment.

Some of these cases are under appeal and could be reversed although, we strongly believe it to be unlikely under the the prevailing mood against defrauding banks and bankers for their known misdeeds and mischief.

 

Landsbanki Luxembourg S.A. Vs. Borrowers. 25th April 2015 in Court of First Instance 8 of Marbella

The court invalidates the foreclosure proceedings against the borrowers and terminates the case on grounds that the lender Landsbanki Luxembourg S.A. had grossly failed to file the adequate documentation alongside the foreclosure petition.

As a result, the bank is barred from filing foreclosure proceedings against this borrower for good.

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2 Claimants Vs. Danske Bank International S.A. 31st of March 2015, in Court of First Instance 2 in Benidorm

According to the Court, it is proven that we are before a contract known as “Equity Release”, named as “Home Income Plan” for retired people where the bank grants a loan that it is invested either directly or via a third party, retaining the lender a pledge over the investment, with a view to obtain sufficient income to finance the loan and hopefully, an excess that will supplement the customer’s pension.

The customers only received part of the loan, the balance being kept under control of the bank and later being invested through complex financial products, retaining the lender a pledge.

Court determines the nullity and voidness of an equity release mortgage loan on grounds that the clients had no financial or investment knowledge, professional or commercial experience, investment expertise nor sufficient academic training to understand, not even superficially, the financial product offered by the bank. It was also proven that the clients had not ability to select and validly carry out the investments in financial products as those where the loan was invested.

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2 Claimants Vs. N.M. Rothschild & Sons Ltd. 7th of November 2016

            The Court rejects the allegation by the defendant that this is a simple and ordinary mortgage loan because the loan’s destination is predetermined, from the outset, to be invested in a complex investment fund. It is therefore a complex product that includes, inter alia, a loan that is conditional upon the following: the mortgage, the specifications in respect to the drawdowns and the pledge of the investment fund. It is therefore not possible to separate or demarcate the mortgage loan from the destination to be given to the capital.

The Notary that intervened in the mortgage loan was deposed in Court and he affirmed the complexity of the product.

The Court rules that the product does not adapt to the profile nor needs of the claimants i.e. retired pensioners that do not need to make any investment but resort to signing this contract because of the fear instilled in them of announced spectacular and horrific Inheritance Tax.

Neither claimant required this product at this point in their lives, as they owned unencumbered property with a stable financial situation.

The Court orders the Equity Release contracts null and void and orders restitution of benefits.

 _

1 Claimant Vs Surrenda Link Mortgage Funding Nº 1 (SLM). 2nd of May 2017 in Court of First Instance 3 in Vera.

The Court determines that the Equity Release mortgage is null and void on grounds that it consisted of a complex product, that the claimants had no previous investment experience, academic education to understand the product they were purchasing nor there was any evidence that the claimants had ever in their life invested in financial products. It is also established that the claimants had not “investors profile”, not even conservative.

As a result, it is ruled that the bank breached the applicable laws in the matter and the equity release mortgage loan is declared void, ordering a mutual restitution of benefits.

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2 Claimants Vs. Landsbanki Luxembourg S.A. 7th of February 2017 in Court of First Instance 4 in Fuengirola.

The Court determines that the product SITRA II (made up of a loan, a mortgage, an investment and a pledge) is a complex financial instrument whose effects depend, largely, on market values of impossible determination in the contracts, which are usually redacted in abstract terminology, and therefore only accessible to experienced people.

According to the ruling, the neither the defendant nor its agent O.M.M. made any attempt to ensure that a) the profile of the claimants was adequate to the product and they understood the complexities nor b) whether the information provided was clear, concise and transparent.

It is also added that at source, the documentation given to the clients was fraudulent at worst, negligent at best, and because of this the equity release is declared null and void, ordering the mortgage loan to be cancelled and the advance payment retained by the claimant in concept of damages.   

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2 Claimants Vs. Landsbanki Luxembourg S.A. 11 of December 2014 in Court of First Instance 8 in Marbella

The Court determines that the equity release mortgage loan documentation given by the bank to the customers does not allow for an understanding of the product. None of the documents includes clear, concise, detailed or relevant information in respect to the functioning of the product or its financial consequences.

The complexity of the product resides in destining a large part of the mortgage loan to sign up a unit linked life insurance product that is made up of an investment fund. The information provided was manifestly insufficient.

The reality is that not even the bank provides a plausible explanation in respect to how does the investment of the loan through financial products work.

Because of these complexities, the bank should have carried out actions to ensure that the client knew exactly the different possible scenarios and consequences.

The Court determines that the bank misrepresented the real complexity of the product and therefore concludes that the client was unable to understand and accept the product validly, for which reason they decide to nullify the mortgage loan, with restitution of benefits.

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2 Claimants Vs Surrenda Link Mortgage Funding Nº 1 (SLM). 29th of October 2014 in Court of First Instance 3 in Torrevieja (Alicante)

The Court determines that the customers were classed as ‘retail’ and that, as a result, they should have been provided extensive and detailed information on different scenarios of investment performance, associated risks, ensuring that the product was suitable and that it was clearly understood by the customer.

The Court nullifies the mortgage loan and orders the lender to pay 40,000 Euros in damages.

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17 Claimants Vs. Surrenda Link Mortgage Funding Nº 1 (SLM).  30 of November in Court of First Instance 11 of Bilbao

Court of First Instance 11 in Bilbao has ruled that twelve mortgage loans valued at 6 million Euros, granted to British families mostly in the Malaga province between 2004 and 2007, should be declared void.

The Court dealt with this case as all loans were granted at a Bilbao Notary Public and the representatives of the lender, SL Mortgage Funding nº1 Limited (SLMF), were also based in the Basque city, according to Lawbird Legal Services S.L.P.

These loans were sold to attain a reduction in potential inheritance tax, since the mortgage would reduce the taxable value of the property, but also to supplement the modest pensions received by the owners of the properties.

Chester-based SL Mortgage Funding nº1 Limited (SLMF) had not applied for the necessary regulatory permits to legally raise funds from the public and provide an investment service, activities reserved and regulated by the Bank of Spain and the CNMV (financial regulator).

Despite not having any of the above authorizations, SLMF would lend but at the same time retain most of the proceeds of the loan, which would then be invested by them.

The ruling declares that “infringing the protocols set by the relevant administrative authority to supervise the disputed product is a regulatory violation that exceeds that of a mere breach of banking laws, such as misselling, so profusely dealt with recently in relation to the massive sale of complex financial products.”

The Judge held that in this case, the breach of public policy “is far more serious for it makes a mockery of a whole system of financial and banking supervision designed to prevent abuses to consumers and protect the stability of the sector”, and likens this behaviour “civil fraud”, which is any proposal that contravenes mandatory regulations or has a false or forbidden reason.

The sale of this product was conducted via commission-earning financial advisory firms, namely David Driver from OIB, Hamiltons Financial Services and Henry Woods Investment Management, based in Estepona, Marbella and Fuengirola.

SLMF also recommended a network of lawyers that created an appearance of seriousness, downplaying the extent of the lack of licensing requirements of the bank and the product.

According to Lawbird Legal Services S.L.P., for the claimants, the ruling confirms that operating in breach of mandatory banking and financial regulations makes the suspect a “boiler room”, -even if the company was legally operating in their own country- and allows the victims to rid themselves of a nightmare lasting for over 10 years.

The Judge concludes that the nullity and voidness should be made applicable to all contracts and agreements executed between the clients and the bank, applying the laws of contractual termination in odd fashion –albeit most favourable- as clients “will be able to claim what consideration they gave under the contract without having to return was given to them.”

 

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