Bankia acknowledges that for years it intervened and married prices in its domestic market for the purchase and sale of preferred shares , but that it did so because “such instruments were a regulated product (of legal configuration) controlled and supervised by the Bank of Spain”, as representatives point out. of the bank chaired by José Ignacio Goirigolzarri in a brief of appeal addressed to Judge Fernando Andreu, who investigates the scandal of these financial products.
The case of operations maintained the fiction, according to the complainants, that the preferred ones were a profitable and liquid product. The origin of the complaint, as the complainants themselves have argued, is that the purchase and sale of preferred products (for which they are affected more than 300,000 people) was carried out not through a free and open market in which prices were adjusted by supply and demand. As the National Securities Market Commission acknowledged in a report published in February, the market was altered through an “internal case” process that was internally managed by the entities themselves : they made the sales and purchases of these products always marry in prices around 100% of the nominal value, which caused a loss to the buyers who paid above the estimated price.
This manipulated market in which the entity determined the purchase price “unilaterally” served, according to UPyD (first organization to which a complaint was admitted in the National Court), to “maintain the fiction that it was a liquid and profitable product and sell it as if it were a mere deposit and not a perpetual product (…) That lack of market -deceived from the beginning by the direction of financial institutions- is the key element of the alleged perpetrated scam “, they denounce.
A “common” practice
It was not until October 2011 that the CNMV forced the entities to stop applying the case of operations The defense of Bankia, however, points to the authorities (CNMV and Bank of Spain), who were those who knew and endorsed the legality of these practices . They recognize that the National Securities Market Commission described it as a “bad practice” as of June 2010, although ” at no time did it prohibit the functioning of the internal market managed by financial entities”.
The operation of internal case was ” common to the generality of Spanish credit institutions , both at the level of banks and savings banks,” argue from the nationalized bank, while acknowledging that the authorities held talks to replace the system with one “more organized and external”.
Although the CNMV considered the so-called “case of operations” a bad practice , it was not until the end of October 2011 that the immediate cessation of this type of operation was demanded. “Therefore, the CNMV accepts the transactions of cases between clients at 100% until the moment of answering the request”, which in the case of Bankia occurred on November 15. The entity, in any case, maintains that these bad practices would constitute an administrative infraction at most, and never a criminal offense.
No to “retrospective crime”
Neither Bankia nor BFA even existed when the preferred ones were designed and marketed “ In a brief of allegations sent on June 18 to the National High Court (see attached document), Bankia develops other reasons why it considers that it did not commit any crime in relation to the design and marketing of this complex financial product.Indeed, the entity alleges that no criminal liability can be attributed to it since the entry into force of the reform of the Criminal Code that allows for the attribution of crimes to legal persons was subsequent to the facts denounced . According to the representatives of Bankia, their criminal charge “based on the retroactive application of said law, would simply be unconstitutional”.
Bankia makes it clear that the calendar is on its side, and thus, discharges any possible liability in the boxes that resulted in the BFA-Bankia group: Caja Madrid and Bancaja, among others. “The truth is that neither Bankia nor BFA had been set up even when the design, issuance and commercialization operations of the preferred shares that are said to be fraudulent took place,” they explain, so “they could hardly have participated in the alleged machinations” they are blamed
The entity chaired by Goirigolzarri highlights in its allegations that the seven savings banks that ended up forming BFA-Bankia kept, “and still maintain today, their legal status unchanged.” It is not possible to ask the bank for criminal responsibility for what has been committed because “there is no identification between Bankia and BFA with the integrated savings banks” .
The Prosecutor’s Office, which has largely endorsed the arguments of Bankia’s defense, sent a letter adhere to them. This decision has been appealed by UPyD , which on Wednesday sent to the National Court a document of allegations in which it opposes the request of the prosecutor to cancel the investigation of this financial scandal.