Archives for Legal Action

Nykredit’s Entire Spanish Loan Portfolio Could be Void

6th July 2014 by admin under Legal Action     

Nykredit in Spain, with offices in Marbella (Centro Comercial Plaza), could see all of its Spanish loans declared void by the Courts.

The reason is no other than the appalling wording of many clauses of their standard Spanish mortgage loan contract, notably the “applicable interest rate” clause.

This extraodinary discovery happened when lawyers acting for a victim of Nykredit’s nefarious Marbella branch, who had been served with a foreclosure Court claim, analysed with a fine-tooth comb the wording of the loan contract…only to conclude that it was impossible to establish which rates were applicable and crucially, what was the total sum owed when repossession proceedings got underway.

Lawyers have concluded, following 48 hours of collective ‘brainstorming’, that it is not possible to arrive at a discernible figure on the above concepts.

Now let’s see how Nykredit’s clever Danish lawyers worded the diverse formulas used by the bank to charge interest and calculate outstanding balances:

The value as certified by the Copenhaguen Stock Exchange.

In case of disappearance of the above, the value certified by any other Public Administrative Body.

The “market” value.

The market value paid by Nykredit for the “underlying bonds”.

An amount that could be, in any event, different from the “OBL RESTGAELD” debt.

The value of bonds issued under code “ISIN”.

A formula totally different from the above, in case Nykredit decided to use the prerrogative given to itself of not “taking the above into consideration”.

Quite!

Startled borrowers have stated that if the mortgage loan had been left in Danish language, they would have stood a better chance of grasping something.

In addition to this bungle but as a consequence of the above, NYKREDIT’s Alicante-based lawyers made a total mess in their Court repossession paperwork when, in a futile attempt to cheat the Courts (and their customers), attached the obligatory Outstanding Balance Statement without reflecting the mandatory calculations, without the Notary Public certifying those (when the melon was supposed to ensure the Statement was consistent with the wording of the loan contract clauses, article 218 of the “Reglamento Notarial”) and worst of all, forgetting to legalize the signature of the person ratifying the Statement (a Sussie Nyholm, who at the time happened to be in Denmark, or just as always be believe because she lives there…).

And to cap it all, as for applicable law, Nykredit expressly noted the following:

This loan will be subject to Spanish laws and Courts.

Should the Courts declare void the above 2 clauses in the loan contract, by application of Spanish Consumer laws and notably, the recent 2013 European Court of Justice ruling, the following could happen:

  • Foreclosure proceedings are set aside, with costs (circa €70k).
  • Only some clauses are declared void, forcing Nykredit to instigate repayment in normal declaratory proceedings where, unbeknown to the lender, a 50-page claim has been lodged against them and their sidekick, Sydbank, for running an illegal Equity Release scheme.
  • The mortgage loan is declared void, with unknown legal consequences.
  • The entire Nykredit loan book in Spain, Equity Release or not, face the threat of having their legality challenged in Courts.
A daunting prospect whichever way one looks at it.

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Rothschild Denies Responsibility Over Equity Release

1st July 2014 by admin under Legal Action     

Claire Whittet

Attempts by MP Huw Irranca-Davies to seek a plausible explanation as to the purpose of the Credit Select tax-evasion facility, and the effects it has had on purchasers of this mortgage/financial scheme, has been met with indifference by an ubiquitous Claire Whittet, from Rothschild. The below email was sent to ERVA from the office of MP Huw Irranca-Davies, together with Rothschild`s formal answer:

Further to a recent meeting between representatives of Rothschild and Huw Irranca-Davies MP, the following letter was received. (attached)

Rothschild have agreed that this can be publicly circulated, so I have posted this on the ERVA site and Huw hopes it may be useful.(hopefully tomorrow/Friday)

Huw Irranca-Davies reiterates that he cannot – for reasons of parliamentary protocol and resources – enter into individual correspondence with individuals other than his own constituents. Where individuals have a direct or clear familial link with a UK parliamentary constituency you may want to approach the relevant Member of Parliament for that constituency. Huw is happy to discuss the issues with any other M.P’s and to collaborate where appropriate.

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Landsbanki Misleading Advertising Case Due to be Filed

19th June 2014 by admin under Legal Action     

Lawyers acting for Landsbanki victims are due to file a misleading publicity case against Landsbanki Luxembourg S.A., Lex Life and Pensions S.A. and Offshore Money Managers Correduría de Seguros S.L.

The case is based on the extensive fraudulent publicity that all three entities issued when offering the product known as ‘SITRA’ (Spanish Inheritance Tax Reduction Scheme), ‘Capital Insurance’ or ‘Equity Release‘.

According to the documentation that lawyers hold, the following has been established:

  • The product was devised as a means to reduce, or eliminate completetely, Spanish IHT. We now know this is not only untrue, as it proposes customers to defraud the Spanish Tax Office.
  • The product was also designed to potentially produce an income, it being the difference between the return on the invested asset, minus charges and expenses, and the cost of servicing the loan. This was just one possibility, the other more likely one being total loss.
  • The advertising stresses prominently the benefits of the product but omits the risks involved -or if at all features these in small print- namely the loss of the property and further. 

Landsbanki was extremely successful in attracting new customers by using its main feature: reduction of Spanish Inheritance Tax. Lex Life & Pensions did too.

And Lex Life & Pensions used the name top Spanish firm Cuatrecasas to push sales, by admitting the following:

this product has been ellaborated in conjunction with top law firm Cuatrecasas

Lawyers are awaiting a formal response to a letter sent to Cuatrecasas but we can anticipate the response: “we deny any involvement and do not want to know anything about this product”

The case is to be filed with Courts in Malaga and will focus on the defendants’ advertising.

As for the role of OMM, its responsibility is two-fold:

  • Active participation in the promotion and marketing of the product, generously remunerated with an introduction commission and further, by receiving regular trail commissions (as is the case with Jyske bank too).
  • Attribution of joint responsibility to any media outlet used to promote and market a particular product or service (rulings by Madrid Appeal Court rulings 17/6/2008 and 30/9/2009).

A case for misleading publicity narrows down the scope of the dispute as it confines the Judge to rule on whether the advertising is/isn’t misleading, without giving any room for further interpretation (i.e. namely misselling: whether customers could and should have sought further advice, whether they were savvy investors or suitable for the product, whether it was a high risk speculative product known to the public etc.).

OMM has declined to come forward to assist claimants, ignoring letters from lawyers inviting them to participate in this case as witnesses, and yet their fraudulent advertising is still today available to the public.

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Conversation between DANSKE BANK INTERNATIONAL and Son of a Victim

11th June 2014 by admin under Legal Action     

Søren Glente

This conversation was taped by the son of a Danske Bank International S.A. victim, and Soren Glente, at the time one of the bosses in charge of selling the Capital Assurance. The conversation had already been postedin this site but now, we have the most relevant parts in writing.

In the recording Mr. Glente, a classic Luxembourg-based Danish banker, has a rare fit of honesty and sings like a canary: 

 

Minute 15:00 onwards

S.B.: How would you describe the risks of this product?

Soren Glente: Well ehhh depending on how aggressive the client would like to be then, I mean if you did it only for the purpose of optimize your tax situation. Then the risk is quite small, it will cost you something each year, I mean the difference between what you paid and the interests of the loan and what you could achieve on interests of the       and if these were place cautionally  the income from the assets would be less than what you paid on the loan, and that would be the price of …

S.B.: and was that made clear to the client?

Soren Glente: oh yes sure, for the

S.B.: so the income from the loans, sorry the income from the assets and investment would never cover the loan? Ehh?

Soren Glente: no , if you wanted to have a very cautious investment profile, then you couldn’t you couldn’t have , the income couldn’t achieve the cost of the loan, no. if you wanted to to achieve that on the loan , then you had to be take some kind of risk, like buying more risky assets

S.B.: so it was really ehh

Soren Glente: and so on and so on

S.B.: so in order to be low risk it was loss making

Soren Glente: yes, that’s for sure

S.B.: and loss it was going to accumulate every year

Soren Glente: yes, not by much, but yes, it would, it would accumulate each year because you would be ehh, you would be able to get an income from, let’s say your deposit or your short term bonds which would be ehh, the income would be less than what you paying interests on the loan, so therefore it would accumulate each year, yes it would

S.B.: do you think my clients understood that?

Soren Glente: yes they did, because I explained that to them, when I had meetings with them, I explained them , because I was, when I spoke  with clients ehh or with your parents ehh, they were, in the beginning the investments was very conservative  placed by me in an agreement with them, and then each year they could see that the capital actually degrees value, that the assets couldn’t provide income which would pay the interests of the loan, so therefore they came to me actually and ask whether I, we should consider changing the assets to more risky assets, in order to achieve a higher income, so I had a long dialog with your clients, ohh with your parents  about that, because I had to tell them that if they wanted that, the risk would increase and as far as  I remember we agreed to take a small portions of your parents’ assets and place them in a slightly risky assets, in order to at least break even, that is as far as I remember, but you could see, but you should be able to see that on the notes or… so that’s what happened. So  I remember I had a dialog with your clients, with your parents  in the bank sometime

S.B.: mmm mmm

Soren Glente: but we are going many years back now

S.B.: right, well I think that they did not understand it, I don’t think that they understood that from the beginning when they signed up to this contract, that this was going to run it to loss, if it was going to be lowerer QQ  

Soren Glente: no, you might be right. That they didn’t because, you might be right that they didn’t understand that

S.B.: mmm there were…

Soren Glente:  many many clients on the costa del sol didn’t understand that you can’t just, you can’t you can’t just automatically make money out of the negative equity, which it actually was, without taking risks and that has been the case for many many unfortunate clients down there that they are they have placed assets on too risky assets too risky assets like equities and things that were having a loan on both the house and the assets

S.B.: did you know the others, do you know,   how many other clients did you have like my parents?

Soren Glente: several

Up to minute 20:00

 

Minute 32:50 onwards

S.B.: and do you still sell this Company insurance scheme product?

Soren Glente: yes, by all means if people they are wanting to tax optimize their situation then that is one of the best schemes you can sell in.it really is

S.B.: but there is dispute about whether it does actually protect against Spanish inheritance tax, not everyone says, not everyone says it protects

Soren Glente: yes, but I have got a legal opinion saying differently

S.B.: from who, may I ask who from?

Soren Glente: it was from several other companies Price Waterhouse Coopers in Spain in Madrid, we have a legal opinion from these guys

Minute 34:03

Soren Glente: Yo have to do it right to have it to work, but it does work, you just have to know that the reason for doing this is not to release your equity from the property to in order to buy a new car or whatever you want to, the reason for doing this is to optimize your situation for wealth tax and yeah mainly inheritance tax, wealth tax was also an issue, but it is a lesser issue today

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Rothschild Case: Málaga Court Formally Orders Service of Process

8th June 2014 by admin under Legal Action     

The Malaga Mercantile Court 1 Bis, with date of the 7th of May (received by actign lawyers on the 5th June) has formally accepted the claim, its jurisdiction on the matter and service of process on the Spanish addresses provided for N.M. Rothschild & Sons.

Defendant Rothschild could do one of the following now:

  • Accept service of process, appoint lawyers and defend the claim.
  • Attempt to refuse service of process in any of their 2 addresses in Spain (Madrid and Barcelona), demanding the Court to service in their Guernsey offices.
The Courts can then do one of the following:
  • Where service of papers is accepted, the 20 days period will start counting.
  • If they refuse and request that the Particular of the claim are notified in Guernsey, the Court may reject their allegations (most probably) and note their refusal to accept and acknowledge service, continuing the case by default. Alaternatively, the may accept the defendant’s allegations and decide to serve in Guernsey (unlikely).
It is possible that Rothschild will do anything in their hand to delay, obstruct, confuse, protract and hinder the efforts of their victims in exposing their Credit Select Series 4 mortgage loan deceiptful advertising, all the while arguing that, whatever was published on the tax benefits of their product it was “for guidance only”, and not be “relied upon”.

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SLM Group Gave 40 Million in Spanish Equity Release

24th May 2014 by admin under Legal Action     

(image of Peter Hardy)

It has been revealed that Surrenda Link Mortgage Holding Limited, now SLM Group, gave 40 million Euros in Spanish tax evading mortgage loans.

The firm Blake Morgan assisted Surrenda-link Mortgage Holding Limited, a mortgage originator, in obtaining a €40 million ring-fenced Spanish asset funding facility.

For its part, Pinsent Masons, a London based banking team, advised Via Capital Limited, in its capacity as arranger of a €40 million secured loan facility to finance a pool of ‘cash release’ mortgages originated by Surrenda-link Mortgage Holdings Limited.

SLM then employed local IFAs, such as Hamiltons (pictured), to peddle this toxic waste in the Spanish Costas.

Nothing new under the sun save for the exceptionally high size of the lending.

 

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Rothschild Case: Malaga Court Demands Spanish Address for Summons

10th May 2014 by admin under Legal Action     

Rothschild Wealth Management & Trust

The Mercantile Courts in Malaga have made a request for lawyers -acting for claimants over the misselling of CreditSelect loans as a means to avoid IHT- to provide a Spanish address for notification purposes.

It is the case that NM Rothschild & Sons, commonly known as Rothschild according to Wikipedia, has a website that boasts offices all over the world, including Madrid and Barcelona.

Should the Court accept any of the above addresses service of process will be duly carried out and Rothschild will have 20 days to respond to the allegations that their company, in their capacity as lenders, a specifically envisaged, designed, marketed and sold a product, the Credit Select Loan Series 4, to defraud the Spanish Taxman.

We must remember that Rothschild has vehemently denied ever providing any type of financial/investment advice. Quite so, the claim has nothing to do with this but with the fact that, in their own words, with the “Rothschild mortgage inheritance taxes would be reduced from a whopping 81,6% to nil”: no more and yet no less.

Rothschild need to be aware that advertising a service or a product is a serious matter because, as you would expect, the public reacts to such offer and acts on it. More so when people rely on Rothschild core principles.

This is exactly what happened with the Credit Select Series 4 Loan: Rothschild, or all companies, offered it as a legal means to avoid crippling Spanish IHT and people bought, because they trusted them.

Now we know different, but so do they…

 

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Mis-selling scandal: Deutsche Bank to Return over 3 million

3rd May 2014 by admin under Legal Action     

Deutsche Bank will have to repay over 3 million Euros to 49 customers who invested, through this bank, inLehman Brothers, Landsbanki and Kaupthing toxic financial products.

In spite of an earlier dismissal of the claim by a Court of First Instance, the Madrid Appeal Court considers that the bank failed in its statutory duties towards their clients: diligence, loyalty and clear information on their products.

According to the ruling, Deutsche Bank failed to explain not only the nature and characteristics of high risk products, such as the “preference shares”  but also, the financial and economical risks of the underlying investments.

The deciding Magistrates stressed that the investors were looking for profitability but shied away from capital losses, adding that there profile was not typical of ‘people gambling away in a roulette hard-earned money saved over a long time.’

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Courts in Fuengirola to Interrogate Danske’s Managing Director

12th April 2014 by admin under Legal Action     

Klaus Mønsted Pedersen

Mr. Klaus “Monster” Pedersen has been requested to attend an interrogation at the Courts in Fuengirola in relation to his role in devising, approving and selling a tax evasion Equity Release Product.

Mr. Pedersen is the Managing Director of Danske Bank International S.A. and ultimately responsible for selling mortgages in Spain on the pretext that they would alleviate the burden of Spanish Inheritance Taxes. He is accused by a number of expats of fraudulent publicity.

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Claim against SL MORTGAGE FUNDING N 1 LIMITED and THE PREMIER GROUP (ISLE OF MAN) LIMITED

26th March 2014 by admin under Legal Action     

ERVA can announce that the claim against SL MORTGAGE FUNDING N 1 LIMITED and THE PREMIER GROUP (ISLE OF MAN) LIMITED -on behalf of 14 claimants- will be filed on Friday 4th of April 2014.

The claim is based on the following grounds:

  • Neither company were regulated to operate in Spain. The company SL MORTGAGE FUNDING N 1 LIMITED actually admitted this was the case as if to avoid the application of Spanish mandatory provisions by attempting, in the opinion of the acting lawyers, to equate the validity of this undertaking to a type of “limitation of liability clause”.
  • Both companies openly admitted that the main purpose of the product, sold with the name “SITIRS” (Spanish Inheritance Tax and Income Release Scheme or Spanish Investment Transfer and Income Release Scheme), was to reduce or mitigate Spanish Inheritance Taxes.
  • Both companies confirmed that they had received the ‘blessing’ of top law firms, ERNST & YOUNG and URIA & MENENDEZ, none of which will admit to this.
  • Both companies concocted a plan to have the products signed in Bilbao through local ‘friendly’ lawyers, Rocco Caira and Javier Bicarregui, both paid generously to sanction a bogus transaction made possible by the teaming up of a group of unscrupulous financial operators.
  • Neither company allowed customers the slightest bit of information that explained the real predatory nature of the investments where the mortgage loans were invested. This was a natural consequence of not having offered the obligatory prospectus, under Spanish laws.
  • Both companies shared directors, a clear indication of their togertheness in the devising of this illegal scheme.
It is still undecided whether the claim will be filed against BNP Paribas Trust Company (IOM) LIMITED and Royal Bank of Scotland (IOM) LIMITED, Custodians of the invested moneys in different times, unregulated in Spain to provide such service pursuant to the Collective Investment Scheme Act and equally responsible of permitting the engineering of a fraudulent illicit financial product for Spain, the SITIRS.

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