Swaps are financial products aimed at large professional investors who play with future exchange flows.
In recent years, interest rate swaps have become infamous because banks sold them to individuals and SMEs during the property boom, rather than to professional investors, as the complexity of the product requires.
As we already anticipated in our blog a few months ago, with the post Swaps: SMEs also beat banks, legal entities can also beat financial institutions in this field and the best proof of this is the recent ruling handed down by the Supreme Court and which has been picked up by the media.
The highest court condemns Banco Sabadell to return its money not only to an SME or retail customer who bought a swap, but also to do so despite the fact that this SME had a financial department whose administrator had a degree in business. To do so, the Supreme Court states that this fact “does not allow it to be concluded that the error was inexcusable” and, therefore, the contract can clearly be null and void.
For the Supreme Court, the complexity of products such as swaps requires banks, when the client is not a professional investor, to comply with a series of requirements in the information they offer, and these requirements do not cease to exist simply because the client has a business degree.
The ruling has set a precedent and leaves the door open for many others to claim not only for swaps but also for matters such as preference shares where many were left out of the arbitration because they had certain financial knowledge, the investments of Abengoa’s retail shareholders, or the Valores Santander which, in our opinion, can continue to be claimed even though the date of 4 October has passed.
With this ruling, Banco Sabadell joins other financial institutions also condemned by the courts such as Banco Santander or Bankinter.
If you contracted swaps or any other financial product and you believe you have been deceived, let us study your case. We offer to give you our legal advice without any obligation. You can reach us on 954 536 038 or 695 694 847. We know how to recover what is yours.
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