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Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

This blog is for all those Off-Plan property purchasers in Spain who have not received Bank Guarantees for their deposit funds as required by Spanish Law, in particular LEY 57/68 Article 1.1 and 1.2 and are now at risk of losing their money. In addition many purchasers who did receive Bank Guarantees are now finding that the Spanish Banks are refusing to honour them without legal action being taken by the purchaser.

10 May 2012 @ 13:08


This week the CAM responded to CBNews articles about expats unable to recover their investments with an exclusive statement.

We contrast this with advice from financial expert and lawyer Francisco Iniesta, who gave a talk organised by the UPyD party in Torrevieja last week.

Also the Plataforma CAM protest group examines clauses in contracts which customers claim contrast with what they were told when the investments were sold to them.


CAM spokesman Juan Valdés Castelló said:

“Banco CAM will maintain individualised contact with customers who have seen their relationship with the CAM damaged by the deterioration of financial investments made.”

He emphasised that while Banco CAM was bought at public auction by Banco Sabadell – which is currently awaiting approval by EU authorities – the Caja de Ahorros del Mediterraneo remains independent but with no control over its banking business.

Sr Castelló insisted that ‘once the restructuring planned in the takeover process has been carried out, the entity is today amongst the most solvent in the Spanish financial system’.

He assured they will contact customers ‘during the weeks immediately after the closure of the operation, and in any case, before the summer’.


Sr Iniesta assured investors have not lost their money – ‘they just cannot get at it’.

He insisted banks cannot expect their customers to be financial experts but alleged CAM directors ‘chose elderly, long term clients who trusted the advice of their managers’.

“They turn to them for advice as they do from a doctor, but did not advise them as specialists,” he claimed.

According to Sr Iniesta, the three products which customers bought – ‘preferentes’, ‘obligaciones’ (subordinated debt) and ‘cuotas participativas’ – are ‘amongst the most complex and risky investments available’.

Yet they were marketed under attractive names such as ‘depósito ahorro combinado’ (combined savings deposit), he said.


The Plataforma CAM alleges ‘the managers of the entity emphasised in their declarations that the clients knew very well the products they acquired and they were properly informed’.

“This responds to the legal cover against possible lawsuits for not complying with the rules of the CNMV (national values market commission) and the Bank of Spain.

“To us it is difficult to accept that those affected had full knowledge of the type of contract they were signing.”

They revealed clauses in certain investment contracts including: ‘Investors may lose the investment made’; ‘The entity is not obliged to evaluate the suitability of the investment and so the client has no protection established in the applicable rules of conduct’; and even, ‘The client was informed that the requested investment is not suitable for them…The client nevertheless confirmed their decision to ask the Caja del Mediterráneo to contract the investment, of their own accord and in an independent manner, leaving the Caja del Mediterráneo exempt of all responsibility.’


The CAM’s Sr Castelló explained the ‘cuotas participativas’ do not form part of the takeover agreement, so their value remains linked to the negative assets of the Caja de Ahorros del Mediterraneo.

Nevertheless, he quoted director general of Banco Sabadell Miguel Montes as saying in March: “Each case will be studied individually, and they will be offered commercial alternatives.”

Referring to ‘participaciones preferentes’ and subordinated debt, he indicated the bank will offer a solution so that ‘they can make their savings liquid’.


Sr Iniesta claimed the Sabadell does not have enough money to buy all the investments back, so would have to exchange them for other products, but the exact terms cannot be set until the EU has validated the takeover.

However he claimed the Sabadell ‘is already taking decisions at the Alicante headquarters’.

He said customers can wait until a solution is offered or must prove the bank did not follow the law.

He argued affected people still ‘only receive confused answers and are badly informed by the employees of the CAM’.

“We do not understand why they were not previously informed about the intentions of Banco Sabadell, and instead since December they have been announcing solutions every two months, prolonging the situation and the illiquidity of the product,” he said.

“Furthermore the situation gets worse as the clients will not receive interest throughout 2012.”

Sr Iniesta demanded it be taken into account that clients with ‘cuotas’ acquired them ‘trusting in the promises and appearances of good management of the CAM, which later were not fulfilled’.

“Regarding the ‘preferentes’ and ‘obligaciones’, we ask to know now the conditions of the exchange and that they will be able to recover 100% of the money invested, so that the trust deposited in the CAM does not disappear,” he added.


Carlos Pena from the Plataforma CAM noted ‘we already said the Sabadell cannot take charge of the ‘cuotas participativas’.

He also claimed the Sabadell will not make the  ‘preferentes’ and ‘subordinadas’ liquid but, ‘exchange them for other bonds which can be converted into shares in a year, but only as long as they are showing an increase or there are sufficient funds to share out profits’.

“They are still tricking the people,” insisted Sr Peña.

Based on previous products emitted by the Sabadell, the Plataforma CAM assures the ratio applied to convert them into shares means customers could lose more than half of their money.


Sr Iniesta’s firm, Strategia financial and legal consultants, is handling civil claims on behalf of investors with ‘preferentes’ and ‘obligaciones’.

It is also pursuing a criminal case against the ex-directors of the CAM, and also the Bank of Spain and the national values market commission for allegedly failing in their duty to supervise the entity before intervening to rescue it last July.

They are offering a free consultation to explain what investments customers have and what their options are.

The Plataforma CAM has registered a case against the ex directors of the CAM with the High Court and invited affected expats to sign up to another identical claim.

Sr Pena insists only a criminal charge entitles them to go after the personal fortunes of the ex directors and entails no risk should they lose.

He also argued it will be much more difficult to pursue a claim against the CAM after the takeover is finalised.

They are holding a public meeting to which they have invited the British and German consuls ‘so they can see the situation of their compatriots’.

The meeting is on Wednesday, May 2 at 17.00, in the CC OO headquarters at Avenida Salamanca, 33, Alicante.

To contact the Plataforma CAM email, for Sr Iniesta’s firm, email

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