The Court of Appeal of Florence has condemned Monte dei Paschi di Siena (MPS) to compensate a couple of Tuscan savers for a sum until 150 thousand euros. The decision, published on August 6, 2024, overturns a previous ruling by the Court of Pisa, which had ruled in favor of the bank. The heart of the matter concerns the failure of the credit institution to comply with information obligations regarding the sale of subordinated bonds to customers. The Court’s ruling is based on a key principle established by the Court of Cassation: banks must demonstrate that they have fulfilled their obligations information duties towards customers, regardless of the assessment of the appropriateness of the transaction.
The case: bond purchase and lack of information
The story begins in 2011, when the couple of savers had purchased subordinated bonds issued by MPS for a value of approximately 200 thousand euros.
The securities, known for their level of risk, were sold to customers through the bank’s intermediation. In 2017, the bonds were included in the mechanism of burden-sharinga measure adopted following the financial crisis that hit the banking sector, transforming bonds into bank shares.
The conversion caused significant losses for many investors, including the Tuscan couple, who found themselves with shares of a bank in difficulty, suffering a sharp depreciation in the value of their investment.
In a first phase, the Court of Pisa had judged the actions of Mps to be in compliance with the current legislation, giving the bank the right. The Court of Appeal of Florence overturned this decision, maintaining that the bank had not adequately informed savers on the risks associated with investing in subordinated bonds, despite the couple having a certain appetite for risk.
The Court established that failure to comply with the information requirements has created a condition of “disorientation” among savers, influencing their investment choices. Even in the case of investors with a high propensity for risk, the bank is still required to provide complete and detailed information on the financial products offered. This is because the investor, even if oriented towards speculative operations, must be able to fully evaluate the risks of the various options available.
What the Court of Appeal decided: compensation
There Court of Appeal has therefore established that the investor couple is entitled to a compensation Of 150 thousand eurosa sum reduced by the amount of approximately 50 thousand euros that savers had already received in the form of coupons before the adoption of the burden-sharing. The principle of the ruling is based on a decision of the Court of Cassation, which places the burden of proof of compliance with information obligations on banks, regardless of the customer’s risk profile.
The ruling clarified that even investors with a speculative profile must be adequately informed about the risks of each operation. The intermediary’s responsibility is therefore fundamental to ensure that customers are put in a position to make informed choices. In this specific case, Mps did not provide a clear and complete picture of the risks associated with subordinated bonds, thus influencing the couple’s decision to purchase those securities.
The decision represents an important victory for savers and could pave the way for other similar lawsuits against MPS or other banks involved in the sale of Risky financial products.
