European Justice support for large investors (companies, funds and corporations) who entered Bankia’s IPO in 2011 and who were harmed by the collapse of the entity. These firms can also claim the bank -now part of CaixaBank- for that stock exchange transaction, as the Court of Justice of the European Union (TUE) ruled this Thursday: qualified investors can also demand responsibility for the inaccuracies contained in the information brochure on its IPO in 2011, as well as small savers who were also trapped at the time.
The Luxembourg court responds in this way to the questions raised by the Supreme Court. Furthermore, the conclusion of the ruling coincides with the opinion published in mid-February by the General Counsel who studied the case. The High Court at the time urged the CJEU to clarify the situation before ruling on Bankia’s appeal against the decision of the Madrid Provincial Court, which upheld the entity’s liability with respect to a qualified investor by the prospectus of the share subscription offer (OPS).
The case confronts Bankia with the Unión Mutua Asistencial de Seguros (UMAS), a qualified investor who attended the bank’s IPO and bought 160,000 shares, at a price of 3.75 euros per share, the amount of that exit to Bag. UMAS wants the nullity to be declared due to an error in the consent in the purchase of shares and that Bankia’s liability for lack of veracity in the issuance prospectus be declared in the alternative.
In this context, the Supreme Court asked the EU Court of Justice if the liability action for the prospectus protects qualified and retail investors when it addresses both, or only the former. The High Court will have to rule on the cases that may come to it from qualified investors, having cleared the way for them to claim. In any case, financial sources indicate that there are still a score of active cases of that IPO. And that the final impact could involve an amount of around 30 million euros for Bankia.
The ruling now known determines that, in the case of a public offering for subscription of shares aimed at both retail investors and qualified investors, the action for liability for the information contained in the prospectus “does not only protect retail investors but also qualified investors ». For the Luxembourg Court, “it cannot be inferred” from the Community directive that qualified investors “do not have the possibility of bringing liability action” because, in the case of a mixed offer, all the investors to whom it is addressed ” regardless of their status, they have that document, which supposedly contains complete and reliable information that it is legitimate to invoke.
In this way, whenever there is a prospectus, “a civil liability action should be able to be brought for the information in said prospectus regardless of the condition of the investor who is considered harmed.”
Second, the CJEU endorses the Spanish regulations that allow a judge to take into account whether a qualified investor “has or should have knowledge” of the economic situation of an entity that goes public “based on its relations with it and the margin of the brochure ”and even“ obliges the judge to take that fact into consideration ”.
However, it adds that this will be possible provided that they do not result in “less favorable” treatment than that granted by “similar” actions provided for in national law “nor do they have the practical effect of making it impossible or excessively difficult to exercise the action of responsibility”.