Spanish lawsuit joins pile of outraged investors targeting Bank of Portugal

A Spanish group of investors – among them a police pension fund – has lodged a legal suit over Bank of Portugal’s handling of so-called BES resolution. Forty-four investors are involved, claiming more than €46.9 million in damages.
The suit joins scores of similar legal bids targeting the institution led by Carlos Costa and was filed at Lisbon’s administrative court last week.

Relating to what has been dubbed “the controversial Bank of Portugal bond dump” (click here).

funds and businesses involved include Canarias Shipping Actividades Portuarias, Cartesio X, Fonbusa, Fonbusa Mixto, Corporacion Ivamosa and the Caixa de Previdência Social da Polícia Espanhola.

But how relevant this development is remains to be seen.

Certainly, ratings agency Moody’s thinks that it is “unlikely” that any lawsuits lodged over the bond-dump will see Portugal’s courts ruling it illegal.

Despite the outrage the €2 billion dump caused in financial circles, and irrespective of the censure that came from the IMF (click here), Moody’s said: “The Portuguese judicial system guarantees that even if a court decides that an administrative act was illegal, it can determine that the consequences of an annulment of this act would be exceptionally negative for the public interest”.

As in the this case, the reversal of the dump “would certainly prejudice the public interest”, the agency concludes it is “extremely improbable” that anything will change.

Nonetheless, damaged investors continue with their pressure.

Another ‘new case’ last week was presented by battling dentist Ricardo Ângelo – the leader of the original ‘association of the duped and damaged commercial paper holders’ – who is now using the civil courts to try and reclaim 505,000 euros.

Ângelo’s association is already involved in suits claiming a total of 432 million euros – less than half of which is being secured by the Resolution Fund, say reports.

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