It's incredibly cruel as an organization of people academically trained in the best educational institutions cause a mess knowing what would happen at the outset. Year 2008-09, crisis destabilising financial system in an exorbitant way, banks sink into an uncontrolled abyss, compensation and early retirement are distributed as lottery tickets... What do we do! so, take advantage of the middle class, never make them case and if we meet any illegality does not pass anything, our friend the Government gives us a reprimand and we continue to our.
Thus were born 'toxic' products as they were in his day the "subprime mortgages". Mortgages that drowned everyone with sky-high interest that where more than one generation. As crisis in the construction were leaving dried, they decided to go for the few who have not invested in construction or invested but having much money could continue speculating anyway.
These are the products of which I speak:
- swaps (contracts of interest rates) contracts.
- santander values (emission which was placed among its own clients).
- subordinate obligations.
These complex products that have been placed among our population without convey sufficient information and inform what the level of risk that entails acquiring them, is taking a toll by not reading the prospectus in the same way that we had to take a medication.
Today I focus on the preferential, a product that currently we are hearing much through all means, acquaintances and friends. A product that has served them to defraud the people standing with the simple goal of accumulating more money to deal with the crisis.
The preference shares have been sold to individuals and companies as a complement to a tank or fixed-term when nor by far was that. Therefore it is not a deposit.
Sometimes has a perpetual maturity (not never expires). They are linked with a coupon that is usually paid annually and that are obligatorily linked to the economic results of the CA. However, neither are warranted, nor is a safe product... is a high-risk product. they are not equity shares.
All investors realized this when they ceased to receive the annual coupon due to the economic problems of the CA and saw fly until part of the main capital they had. they are not bonds.
Then... What hell is this? It is a type of debt which is listed on the financial markets. When companies and the State issued shares, bonds, debt, private debt is done through the primary market also known as the "emissions market" under the supervision of the National Commission of securities (a questionable job) market.
I must unfortunately say that all those holders of preference shares that don't constantly move tab to remedy the situation will have to take very significant losses or OK wait a few years to recover the capital (temporary losses).
We identify preferred with banking institutions. This always is not as well since they have issued these shares both banks as companies (Telefónica, repsol). Most have been banks to sell their own. It is very important to know that to pursue legal action there to go against who emits but who sells them (only banks).
From the outset this product should have been deleted and not left to come to the public since it has not only been wrong's book but a breach of the law. The laws are supposed to protect and avoid complex products to be sold to retail customers but apparently seen you have to dip into the proverb: "putting the law, check the trap".
There are a number of solutions that help who is in this terrible situation. As I have said previously the preferred are emitted in the primary market. Thus when we buy them directly we will also called secondary market "stock exchange" in which we can sell to another investor our participations by the Bank. It would seek a buyer. But doing this means taking a loss around 65% of the initial capital.
These are the solutions linked to preserve capital or lose as little as possible:
- Exchange: go to the Bank that sold us the preferential and ask that they offer us an Exchange or a solution to cancel the product and return us our capital. This will not be possible sometimes. The Exchange is an exchange of one product to another but offered fewer exceptions currently comes to delay the recovery of the money and losing a share of the capital. Attentive to detail. Redemption can be made with reserve or without reservation of legal actions. They will obviously give us without reserve so that we can not claim in the future. The acceptance of the Exchange will lead to leak of initial capital or accept a delay in the payment.
- Complaint to the institution itself: if it does not satisfy us redemption will have to accumulate all the documentation that we have and make a claim in the same bank that sold us the product. They have within 2 months counting from the time we filed it.
- Complaint to the CNMV: if the previous claim was not the expected result can attend the institution that protects the rights of the investor and the claim there.
- Recourse to justice: as last solution will put a lawsuit by the civil courts with a duration of one year or two keeping in mind that the costs of the fees have risen by more than 500%. What comes to sue is that it rollback to the moment before the signature so that they return the capital of these preferred shares. With all this, the judge will decide if that sale was successful or not.
News headlines above preferred this last month:
- Affected by preference in hunger strike in Ferrol (30/12/2012).
- the holders of preference of bmn, caja3 and ceiss lost up to 70% of the capital (20/12/2012).
- Almunia unveils today the demands of Brussels for recapitalisation of bmn, ceiss, caja3, and liberbank (19/12/2012).
- The Government will ask arbitration to holders of preferred of bankia (18/12/2012).
- A court condemns liberbank to return the money to a customer who purchased preferred (02/01/2013).
This situation I has reached is could have been avoided if all buyers have researched a little about what you buy. We don't have to let us sell but we must go in search of what they want to buy. Especially in quantities exceeding the 3,000€, is our essence and the means to survive in this long crisis. We cannot know with certainty what will happen to us in the future, but we can make efficient decisions at present to predict it.