Our 2013 annual meeting was held in Madrid, Spain. We were graciously hosted by the Bank of Spain, the Spanish Congress, and the International Financial Litigation Network (IFLN). This newly established network is the initiative of one of the leading and most esteemed law firms in Spain – Cremades & Calvo-Sotelo. Roger Ganser, Chairman of the World Federation of Investors (WFI), and President-Secretary General Dr. Jean-Pierre Paelinck, were invited as speakers and representatives of individual shareholders worldwide.
While meeting in the Bank of Spain headquarters we were told about a planned suit against the Spanish Bank. During the crises, the Bank of Spain decided to merge five or six failing banks into one new bank named Bankia. The Bank of Spain endorsed the mergers, a top three accounting firm gave its blessing, and the participating banks promoted the new shares to their savings account customers.
While the IPO was successful, there was no institutional investor participation. Six months later, Bankia filed bankruptcy. It seems that neither the Bank of Spain regulators nor the auditors fully analyzed or uncovered the pending losses.
A leading lawyer in Madrid took the unprecedented action of suing the Bank of Spain. In Spain, as in many countries, there is no "class action" ability. So the lawyer is not only suing the Government Bank but is also attempting to establish the ability to represent the thousands of individuals who lost most of their life savings in the bank stock failure. When our group left the grand Bank of Spain headquarters we faced a large group of protestors, all shareholders of Bankia. They were common folk, many of them retirement age. A very sobering message and event for all of us.