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Western Europe

Belgium

Dec 2016 - Anti-money laundering: risk of failing to apply own policies
A recent money laundering dispute has shed light on how the Management Committee of the National Bank of Belgium (NBB) interprets certain provisions of Belgian anti-money laundering laws concerning business relations with Politically Exposed Persons (PEPs).

July 2016 - New out-of-court settlement in Belgium for bribery, fraud and money laundering offences
A new law has introduced an out-of-court criminal dispute resolution procedure which is available to, inter alia, a legal entity accused of bribery, fraud or money laundering. Provisions relating to another alternative to trial, the “settlement of claims”, have been partially annulled by the Constitutional Court. This article considers the changes, and the implications for banks. (Act of 5 February 2016 and Decision of 2 June 2016, case No. 83/2016)

Mar 2016 - ECHR rights apply to FSMA market manipulation proceedings
Human rights arguments have been used in several Member States courts1 to challenge market abuse sanctions imposed by administrative authorities. This article examines a recent ruling by the Brussels Court of Appeal (the Judgment)2, in the context of the former Fortis group, in which the Court has ruled unambiguously that ECHR Rights apply to FSMA proceedings.

Nov 2015 - Sale of Bermudan swaps to SMEs and duties of banks: increased scrutiny by the financial regulator and the courts
As demonstrated by recent FSMA investigation of four Belgian banks and a number of court decisions, there is increased scrutiny in Belgium by the courts and financial regulator in the context of the banks' duties to SMEs when selling Bermudan swaps.

July 2015 - New Belgian Law targets "Vulture Funds" buying up distressed Sovereign debt  
A draft law in Belgium aims to reduce the number of "vulture fund" claims, against insolvent sovereign states, being brought in Belgium. 

Mar 2015 - Introduction of the Belgian Collective Redress Act and Impact on the Financial Sector
The Belgian collective redress act (the Collective Redress Act) entered into force on 1 September 2014. The Collective Redress Act will have a major impact on litigation involving consumer damage caused notably by banks and other financial institutions located in Belgium, and also potentially outside of Belgium.  

Feb 2014 - Twin Peaks II: impact on bank liability
We summarise below some of the measures contemplated in the Twin Peaks II Law that are aimed at increasing the protection of consumers of financial services and products. The measures will have an important impact on the standards of liability applied and the litigation of claims for mis-selling.  

Sept/Oct 2013 - Belgian aspects of the Argentinian sovereign debt litigation; 
Eurobondholders v The Bank of New York Mellon SA and Euroclear Bank SA, 28 June 2013. 

Mar 2013 - Misleading advertising and the "average consumer" 
The Antwerp Court of Appeal has handed down an important decision on the alleged mis-selling of "excess value mortgages". 

France

Dec 2016 - Bank’s faults reduce compensation from rogue trader
A bank with inadequate regulatory systems and controls has been compensated only for a fraction of the losses it incurred from the improper trading activities of a former employee. In what appears to be a significant change of approach to compensation claims where a victim is partially at fault, the French Supreme Court (Cour de cassation) ruled that the bank’s own fault had to be taken into account in order to determine its right to compensation.

July 2016 - Creditors likely to find it more difficult to enforce against foreign state assets in France
The ability to attach assets of foreign States in France is the subject of a new Bill. A proposed requirement for judicial authorisation for attaching such assets and more severe rules on specific assets are likely to make it more difficult to enforce judgments against foreign State assets in France. Banks will need to be aware of the proposed changes because, if they come into effect, they will be affected both as creditors and also when freezing bank accounts.

Mar 2016 - Tackling market abuse and corruption - finally
In the next few weeks, the French Minister of Finance should present to the Government a Bill which would, if adopted, reform the French regime on market abuse, create a new anti-corruption agency and impose an obligation on businesses to implement strong compliance programs. Inspired by the U.S. and UK legislation, this Bill could represent a transformational change in the French legal framework.
 

Mar 2016 - First successful prosecution for a recommendation based on inside information
A recommendation to acquire or dispose of a financial instrument on the basis of inside information is market abuse, even if no inside information is transmitted to, and no action is taken by, the beneficiary of the recommendation. This is the first ruling on this issue by the French Administrative Supreme Court (Conseil d’Etat), which decided that making such a recommendation is an autonomous infringement (distinct from the use or the disclosure of inside information).

Nov 2015 - The French legal regime on market abuse: what next?
Market abuse has been the subject of much debate in France since the March 2014 decision of the European Court of Human Rights in the Grande Stevens case.

Nov 2015 - French Supreme Court rules again on asymmetric jurisdiction clauses
The French Supreme Court has handed down another decision on the validity of one-way jurisdiction clauses, this time finding that the clause in question was enforceable.

July 2015 One-way jurisdiction clause invalid 
French Supreme Court, First Civil Chamber, 25 March 2015, ICH v Credit Suisse, No. 13-27264.

Mar 2015 Bank liable for losses caused by Madoff fraud: Cass Com, 25 November 2014, No 1318414 
The commercial chamber of the French Supreme Court (Cour de cassation) has ruled that a bank was partially liable for losses caused to an investor in Madoff shares, even though the investor was sophisticated, and not advised by the bank.

Nov 2014 European Court of Human Rights ruling forces AMF to reconsider sanction 
In 2002, the COB (the predecessor to the AMF) issued a decision that prohibited a company and its president from managing third party assets.

June 2014 - French Supreme Court endorses the imposition of both AMF and criminal sanctions for same market manipulation event: French Supreme Court, 22 January 2014, No 12-83579
The French Supreme Court has held that the imposition of a criminal sanction, following an administrative sanction by the Enforcement Committee of the AMF (Autorité des marchés financiers), relating to the same market manipulation event is not contrary to Article 50 of the Charter of Fundamental Rights of the European Union (the Charter) or the non bis in idem principle.

June 2014 - New legislation introducing group actions in France - Law No 2014-344 of 17 March 2014 on Consumer Protection 
After 40 years of debate about a potential introduction of group actions in France, the French legislator finally adopted the so-called "Consumption Law" on 17 March 2014 allowing such actions.

Feb 2014 - Banks must disclose margin arrangements in hedging operations
The Paris Court of Appeal has defined the scope of a bank's so-called "duty to inform" and "duty to advise" in hedging transactions.

Feb 2014 - Paris Court of Appeal annuls AMF decision for violation of the European Convention on Human Rights
The Paris Court of Appeal has annulled a decision of the Enforcement Committee (Commission des sanctions) of the AMF (Autorité des marchés financiers) on the basis that it had violated the European Convention on Human Rights (ECHR).

Sept/Oct 2013 - AMF fines asset manager for undisclosed conflict of interest and inadequate CDO valuation
The Sanctions Committee of the AMF has handed down an interesting decision relating to the duties of asset managers as regards conflicts of interest and valuation of collateralised debt obligations (CDO).

June 2013 - A step closer to group actions in France
A commentary on the reform proposal on class actions presented by Benoît Hamon to the Conseil des ministres on 2 May 2013.

Mar 2013 - Authority of French banking regulator to extend its investigations to branches of a French bank located outside the EU
The Enforcement Committee (EC) of the Autorité de Contrôle Prudentiel (ACP) has found that the ACP lacked the necessary authority to pursue claims relating to investigations conducted in branches of a French bank located outside the European Union (EU).

Mar 2013 - Due Diligence duties of Asset Management companies - the Madoff funds example
The Enforcement Committee of the French Financial Markets Authority has held a management company liable for having failed its due diligence process while investing in funds related to Bernard Madoff.

Dec 2012 - French Supreme Court strikes down a one-way jurisdiction clause
The French Supreme Court has invalidated a one-way jurisdiction clause concluded between a French national and a Luxembourg bank.

Dec 2012 - Recent developments on due process during AMF investigations
The Paris Court of Appeal has annulled a decision of the AMF's Enforcement Committee (Commission des sanctions) on the basis that it failed to comply with applicable procedural rules when interviewing a witness during its investigations.

Germany

Dec 2016 - Germany: German courts dismiss Greek government bondholders’ claims against Greece on state immunity or jurisdiction grounds
German courts have dismissed damages claims by holders of Greek government bonds against Greece following the debt restructuring in 2012. The Federal Court of Justice (Bundesgerichtshof, BGH) held that such actions in tort were inadmissible due to state immunity.

July 2016 - German Federal Court of Justice defines exception to disclosure obligation relating to gross margin of a swap
Exactly five years after its landmark decision in 2011, the German Federal Court of Justice (Bundesgerichtshof, BGH) has handed down another important decision in the ongoing swap saga.

Mar 2016 - Investors bring banking licence claims against foreign banks
German clients of foreign banks have increasingly been trying to shift their losses by claiming damages for the banks failing to have a German banking licence. A BGH decision has confirmed that such claims will only succeed if the loss claimed is the same type of loss that the licencing requirement aims to protect against. If the claimant would have suffered loss even if the bank was properly licenced there can be no recovery. Left open is the controversial issue of when a foreign bank needs a banking licence.

Nov 2015 - Bank required to advise about mismatch between termination rights under a loan and associated hedge
A bank was held liable for not advising a client that an interest rate collar would continue to bind him if he decided to terminate early the loan agreement to which the hedge related.

July 2015 - Bank must disclose initial negative market value of swaps in two-party scenarios 
Federal Court of Justice, judgement dated 28 April 2015, file no. XI ZR 378/13. Following its decision in January this year, the German Federal Court of Justice (BGH) has handed down an important decision on banks' obligations in connection with swap transactions.

Mar 2015 - German Federal Court of Justice Limits Banks' Disclosure Obligations for Swap Transactions
The German Federal Court of Justice (BGH) has handed down an important decision on banks' obligations in connection with swap transactions.

Nov 2014 - German Federal Court of Justice Rules that Banks must disclose all Commissions received from Issuers
The claimant in this case had, on investment advice from the defendant bank, in 1996 bought real estate from a company. The company intended to develop the site, with a shopping centre, and provided a rent guarantee to the claimant.

June 2014 - Federal Court of Justice finds administrative fee clauses in consumer loan agreements to be invalid 
In two landmark decisions the German Federal Court of Justice (the BGH) has decided that standard clauses in consumer loan agreements which stipulate an administration fee to be paid by the customer are invalid under German law.

June 2014 - Federal Court of Justice upholds waiver clause for bank to keep distribution fees 
The Federal Court of Justice (Bundesgerichtshof, BGH) upheld a waiver clause in a bank's framework securities transactions agreement which allowed the bank to keep distribution fees it received from issuers.

Feb 2014 - Disclosure obligations and swaps: An analysis of regional variations in Germany
Judgments by the Higher Regional Courts in Cologne, Düsseldorf, Frankfurt, Munich, Nuremberg and Stuttgart.

Sept/Oct 2013 - Disputed direct debit payments: guidance for Banks
Recent appeal court case law in Germany gives useful guidance to banks on when an insolvency administrator may successfully dispute a debit made from an insolvent debtor’s account under a direct debit authorisation.

June 2013 - German Federal Supreme Court rules on mis-selling claim against direct bank providing execution-only services
On 19 March 2013, under file No XI ZR 431/11, the German Federal Supreme Court clarified the circumstances in which an investor may have a misselling claim against a “direct bank” (ie a bank holding an account for the deposit of securities on an execution-only basis only). .

Mar 2013 - German residents may sue U.S. rating agency for Lehman rating before German courts
The Federal Court of Justice has confirmed that German courts may have jurisdiction for a claim by a German investor in Lehman certificates against a U.S. rating agency.

Dec 2012 - Federal Court of Justice on causation in claims for breach of duty to inform
The Federal Court of Justice has altered its position on the allocation of the burden of proof in cases in which an investor makes a claim against a bank for a breach of a duty to inform.


Luxembourg

Dec 2016 - Enforcement of pledge over shares in Luxembourg, irrespective of whether secured debt due – update
Update following the decision of the Luxembourg Court of Appeal, n°42760 and n°429971, 27 January 2016 and upholding the order of the First Judge of the District Court of Luxembourg sitting in summary proceedings matters, N°356/2015, 15 July 2015.

Dec 2016 - Auto-laundering: Luxleaks impact on suspicious transaction reporting
On 29 June 2016, the Luxembourg criminal court rendered its decision in the famous case known as the “Luxleaks case”. While most of the attention focused on whether the former PwC employees should be considered as whistle-blowers (yes) and whether, as such, they could be cleared from any sanction (no), the decision of the Luxembourg criminal court is also interesting in that it found the former PwC employees guilty of money-laundering.

July 2016 - Luxembourg Supreme Court extends banks’ duty to individual guarantors
The Luxembourg Supreme Court has ruled on a bank’s obligations when taking a personal guarantee (cautionnement) from an individual to secure a loan of a third-party debtor.

Mar 2016 - Repurchase of CPECS from shareholders is not illegal, rules Luxembourg court
The Luxembourg District Court ruled that, from a company law perspective, Convertible Preferred Equity Certificates (CPECs) issued by a Luxembourg company are to be treated as debt instruments so that the repurchase of CPECs by an issuer from its shareholders is not the distribution of fictitious profits. CPECS are commonly used in U.S. investment structures due to favourable tax treatment.

Nov 2015 - Enforcement of pledge over shares in Luxembourg, irrespective of whether secured debt due
The enforcement of a pledge over the shares in a company (thereby triggering a change of control of the company) upon the occurrence of an enforcement event specified in the pledge agreement, notwithstanding that the secured debt was not yet due and that the creditor had not claimed the repayment of the secured debt, has been confirmed by a judge sitting in summary proceedings.

July 2015 - Individials may sue banks based on breaches of conduct rules 
Supreme Court ruling, N° 24/15, 26 March 2015. The Luxembourg Supreme Court has quashed a Court of Appeal ruling that denied an individual the right to invoke, against a professional of the financial sector, a violation of its conduct of business rules. For many years it has not been possible for an individual to base a civil claim against a bank or other finance party on the basis of a breach of conduct of business rules. The Luxembourg Supreme Court’s ruling signals a change in approach.

Nov 2014 - Inadequate outsourcing of administrative tasks by securitisation undertaking 
Under the Law of 2004, a securitisation undertaking operating in Luxembourg and issuing securities to the public on a continuous basis must obtain authorisation by the Commission de Surveillance du Secteur Financier (the Luxembourg regulatory authority of the financial sector, the CSSF).

June 2014 - Luxembourg Court Upholds (1) Pledge Despite Conflicting Spanish Ruling; and (2) Asymmetrical Jurisdiction Clause 
The Luxembourg District Court has reinforced the effectiveness of financial collateral arrangements governed by Luxembourg law by ruling in favour of the enforceability of a pledge over shares in a Luxembourg bank account, despite concurrent and inconsistent Spanish court proceedings which purported to suspend the pledge.  

Feb 2014 - Bank liability for forged transfer orders Luxembourg Supreme Court puts and end to uncertainty on the duty of restitution
Against a backdrop of sometimes inconsistent case law, the Luxembourg Supreme Court (Cour de Cassation) has ruled on the duty of restitution of a bank to its customer where the bank has acted on a forged transfer order.

Switzerland

Dec 2016 - No privilege for investigation documents produced by external legal advisors
The Swiss Federal Supreme Court has ruled that reports and interview notes produced by external legal advisers during internal inquiries into anti-money laundering violations are not protected by attorney-client privilege.

 

The Netherlands

Dec 2016 - Providers of financial products liable for intermediaries with inadequate licensing
In misselling litigation where a financial institution’s investment product was sold to retail investors by a referral agent (rather than by the bank directly) the Dutch Supreme Court ruled that retail investors must be compensated by the financial institution for any losses resulting from the investment product if they prove: (i) that they were advised by an unlicensed referral agent; and (ii) the financial institution was aware or should have been aware of them having been so advised by that agent.

July 2016 - Bank must pay negative interest to client under a consumer mortgage loan
A recent binding advice of the Dutch Financial Services Complaints Tribunal (Tribunal) ordered a bank to pay negative interest to a client on the basis, inter alia, that there was no interest rate floor in the agreement.

Mar 2016 - Termination of credit agreements - not always straightforward
Whether a bank may validly terminate a credit agreement, even on the basis of a contractually agreed termination provision, is often not straightforward and depends on the type of borrower, the availability of alternative funding and the reason for termination. This article examines recent Dutch case law which illustrates the factors taken into account by the courts when assessing whether a termination is valid. 
 

Nov 2015 - Dutch interest rate swap validly terminated for error by SME
A non-professional client of a Dutch bank (the claimant) had entered into an interest rate swap (IRS) under the influence of error (dwaling) and therefore the termination of the IRS by the client was valid.  

July 2015Scope and Limits of a Bank's Duty of Care to Third Parties 
Since the Supreme Court of the Netherlands confirmed, on 9 January 1998, that banks have a special duty of care not only to their clients but also to third parties, and that under certain circumstances banks will be acting unlawfully if they fail to investigate whether the client is acting in accordance with regulatory legislation, banks have been struggling with various questions about the scope and limits of this duty of care.
 

Mar 2015Interest rate swaps litigation
In recent years banks have increasingly come under fire in the Netherlands in relation to interest rate swaps sold to small and medium-sized enterprises.
 

Nov 2014Radical changes proposed to Dutch class action system
In Dutch law, there are currently two class action vehicles. Under the Collective Action consumer organisations and other interest groups can seek declaratory and injunctive relief. 

June 2014New Interpretation of Non-Assignment Clauses: Relevant for Securitisation and Factoring 
On 21 March 2014, the Supreme Court ruled that a breach of a non-assignment clause results in a breach of contract, but is unlikely to affect the valid transfer (and pledge) of the assigned rights.  

Feb 2014 - Recent case law relating to transparency of unit-linked insurance policies
In the Netherlands, unit-linked insurance policies (so-called beleggingsverzekeringen) remain a hot topic for litigation despite various compensation measures by Dutch insurers.  

Sept/Oct 2013 - Legislation on claw back of bonuses 
After three years of debate, a bill on the revision and claw back of executive bonuses and profit-sharing of directors (the Bill) was examined by the Senate on 10 September 2013. 

June 2013 - Plain meaning of the words not always determinative for commercial contracts 
The Dutch Supreme Court decision of 5 April 2013, LJN BY8101 (Lundiform/Mexx) gave an important ruling about the interpretation of commercial contracts that potentially reduces commercial certainty... 

Mar 2013 - Expropriation of SNS Reaal: First application of the Dutch Intervention Act
This article considers challenges to the recent nationalisation of SNS REAAL NV (SNS REAAL) and its subsidiaries including SNS Bank NV (SNS Bank). 

Dec 2012 - Proposal for general duty of care for the financial services industry
In September, the Dutch Minister of Finance presented a Bill for a Financial Markets (Amendment) Act 2014 to the public for consultation.  

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