The recent months and current position

This Blog enabled me to meet 9 other (all Spanish) victims of Moises Erades and the Jávea Branch of BNP Paribas. One of them had already sought legal advice, and there have been two meetings between the victims and the lawyers, explainng the options.

We were told that a Spanish savings bank had acted with a similar disregard for Regulations that govern Banks in Spain, and had repaid all of the money. Lawyers told us that the Bank of Spain can fine a Bank it finds guilty of malpractice, but it cannot award compensation, and disagreed with me when I suggested a fine by the Bank of Spain would create a precedent to guide any investigating Judge. Initially I thought the lawyers were acting 'pro bono' (being so certain that we would win) and would recover their costs from BNP Paribas. At the second meeting, a week ago, Ann and I were told that the expected costs had been allocated according to the amount of each investment, and that ours would be 10.600 Euros.

The 400,000 Euros BNP Paribas still has of the cash we gave them at "5% for 5 years and 100% guaranteed" is now worth around 240,000. We have lost 180,000 Euros already, and Lawyers are asking for another 10.6 with no guarantee that
a) we will win, or
b) if we lose we will not have to pay the costs of the BNP legal team.

One things is CERTAIN in all of this: THE LAWYERS WILL GET THEIR MONEY!!

After the initial meeting, victims signed a "Notary Demand" to BNP Paribas and Banco Gallego for the return of all of our monies. Not surprisingly, Banco Gallego replied that as the 'Demand' concerns events in 2004 and 2005, and as they did not amalgamate with BNP Paribas until 2007, they have no case to answer. Which is what I knew - without legal training.

Yesterday, I did what I should have done 3 months ago: I formally notified BNP Paribas of the way they had allowed us to be abused by their employee; Moises Erades. Oh yes, I forgot to place on record, that Moises no longer works with Banco Gallego. He went to Madrid to answer some questions (I bet he did - because BNP in Madrid read this blog) and Luis was appointed Director of Jávea Branch, to replace him.

This is how I summarised our situation:

My wife

Ann Lilian READ, X0563099J and

and I

Clive Reginald READ, X0563094P

have been clients of BNP since 1985. Whenever we had surplus funds we placed them in 'PromoActivos' which we were told (and read in the BNP Quarterly report) was loaned to Generalitat Valenciana, Renfe and Tabacaleria, and regarded as SOLID. We would NEVER consider placing our money in anything that could GO UP, because it could also GO DOWN.

In July of 2004 we sold a large house in 4500 Square metres that we had bought in 1985, and after buying a couple of apartments, we had 600,000 Euros in our BNP Current Account. We spoke with the local Manager, Moises Erades about various BNP products we received via Correos (with our extractos) and others that we saw in the Bank, but each time Moises told us "They are not for you - they have a risk involved."

We were away from Spain when Moises phoned to say he had a product that was "5% interest, for 5 years and 100% no risk" and that he had reserved 600,000 Euros in our name. We returned to Javea and decided to keep 150,000 in our current account to live on for the 5 years, and agreed that we would put 451,000 into "5% over 5 years, no risk" and signed a transfer for the transfer of the money on 17th September 2004.

Moises said that, as with Promo Activos, we could borrow against the security as we'd done before, paying a penalty of 2% interest. Moises also explained that our money was 100% secure and any rise or fall on the stock market would not affect us.

Early in 2006, we received a quarterly statement, that I thought indicated our balance had dropped drastically, and that we now only had 160,000 Euros (instead of the 451,000 we had transferred), but Moises explained that we had tied up the money for 5 years, but if we insisted on selling now, that was all we would get, but Moises 'ringed round' the 451,000 figure (we still have that piece of paper) and said we were guaranteed return of our 451,000 Euros in September 2009.

WE NEVER SIGNED A CONTRACT - because none was offered to us. We WOULD have signed, had one been put in front of us, even though we could not understand contractual Spanish, because we had TOTAL FAITH in the advice and good name - over almost 2 decades - of BNP. We were proud to be associated with one of the most reputable banks in the World!!

A colleague was in financial difficulties around half-way through the 5 year term, and I asked Moises what the Penalty would be if I withdrew half of the money, but he said it was not possible, as it was for a fixed 5 year term.

In reality, it was NOT a fixed term, there was NO guarantee, and the interest was NOT 5%.

In 2008 we began looking forward to having our money, and being able to do the things we'd not been able to afford for 4 years, but Moises said "In my personal opinion, because of the World cricis, I do not think you will get your money back next September, it may take 2 or 3 years for the money to gain the value it had in 2004."

As a result, we discovered that our 451,000 Euros was NOT in a BNP product (like PromoActivos) but with the Nordea Bank in Luxembourg. Nordea have been incredibly supportive, pointing us to a tracking site where we discovered a graph, indicating that even when the World economy was in BOOM, the product sold to us by your employee Moises Erades, had CONSTANTLY DROPPED in value, reaching as low as 22 cents on the Euro.

We confronted Moises and Luis, the new Investment Manager. who explained that Moises had only told us what he had been told to tell clients by his Head Office in Madrid.

Moises offered to obtain a 90,000 Euro line of credit (with Banco Gallego) against the security of the 451,000 Euros transferred to BNP in September 2004, but Banco Gallego said we'd need to put up property instead.

Because we only had 6,000 Euros in our account, and Moises had authorised our purchasing a new vehicle for 20,000 Euros, we were forced to redeem 51,000 of the 451,000 we transferred in 2004, incurring a loss of 40%. We are now in the position - having so little money in our current account and with large debts to pay - where we need to redeem more - or all - of the original money, which will increase the loss we suffered as a result of taking the advice of Moises Erades and believing he was telling us the truth.

We are advised that Banking regulation in Spain PROHIBITS the sale of any product in a Secondary market to JUBILADOS (and both Ann and I were Jubilados in September 2004, my having started to receive my Spanish State pension in May of that Year) and Ann received her UK State Pension since 2002. We are also told that the same regulations PROHIBIT the sale of a product in the Secondary market to anyone who is not "Financially literate" and understands (in their own language if it is obvious they are not fluent in Spanish) the risks they may be taking.

I have no idea where the TRUTH lies as no one who was a BNP employee (now Banco Gallego) in the Jávea office, will answer our questions. Whether or nor Moises Erades INTENTIONALLY DECEIVED us to earn himself a better commission, or whether someone in BNP INTENTIONALLY misled Moises into giving us wrong information, I cannot know. What I do know, is that BNP failed in their duty of care to us as LONG STANDING CLIENTS, and failed to correctly audit and supervise the staff and their actions in the Jávea office. My words are STRONG, but based solely on the fact that WE SIGNED NO CONTRACT yet BNP invested our 451,000 Euros with another Nordea Bank, without our knowledge or permission, resulting in LOSSES to us (in capital - not interest) of 180,000 Euros.

I know that other people in Javea (who DID sign Contracts with BNP) are considering the possibility of litigation, but at 71 years of age, having survived testicular and rectal cancer, I do not have the time to consider a 5 or 7 year legal battle.

My wife and I believe our situation is EXCEPTIONAL and request the courtesy of your allowing us to travel to Madrid to discuss the way to resolve this situation that, I am sure, neither BNP or us enjoy.

I am happy to respond to any questions you have.

I wonder if we will get a reply?