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The Spanish Lawyer Online
The Spanish Lawyer Online

Spanish Equity Release Fiasco

Exposing Danske Bank, Rothschild, Nykredit, Sydbank and Others


Archive for June, 2011

Bankinter Forced to Reimburse for Lack of Information

June 26th, 2011

The Appeal Court in Murcia has ruled that Bankinter should refund almost sixty thousand Euros for not advising a client of the risks of an investment in Iceland. According to the deciding judges, Bankinter did not provide all the required documentation which by law, is mandatory.

The ruling states that “the financial entity acting as a professional intermediary in the acquisition of a financial product has the obligation to advise a client, in detail, of the characteristics of a product so that an informed decision can be made.” It then adds that “the bank has to cover, specificly, the concrete risks associated with the investment and not make a mere formal note on these, as a matter of course, within a context where profitability is highlighted and risks covered up.”

The ruling also states that the documentation provided was only comprehensible by people of a high financial culture.


Auction Freezing Order is Registered by Judge in Agreement with Prosecutor in Danske Bank Case

June 23rd, 2011

It’s a definitely difficult time for Danske Bank in Spain. The Judge has agreed that a property on which an Equity Release product was raised should be frozen on account of a criminal investigation into the activities of Danske Bank’s employees, inclusive of Peter Staarup, its CEO. The State Prosecutor has not opposed to the measure and thus, it will be lodged with the land registry with immediate effect.

Interestingly, the Judge also notifies this decision to the Economic Crime Prosecutor for an opinion on the matter.


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Danske Bank’s Dangerous Liaisons

June 19th, 2011

The Financial Services Board (FSB), the financial regulator in the Republic of South Africa, had warned back in 2005 that an arrest warrant had been issued in this country against Norman Edwin Steele, as a result of a criminal investigation including fraud.

Mr. Steele, faced with the prospect of serving time at a Durban prison relocated to the Costa del Sol and went on to work with Graydon & Associates, unregulated IFAs operating in Spain and sold, on behalf of Danske Bank, equity-release schemes to mostly British pensioners on the basis of a crafty stratagem that was supposed to release their inheritors from potential IHT liability (Inheritance Tax).

Well, back in time as far as the 19th of June of 2002, the Jersey Financial Services Commission had warned, through a public statement titled “Arrow International Management Services Limited And Norman Edwin Steele“, that Mr. Norman Edwin Steele has not received authorization to conduct investment business within meaning of Law, and that the Commission has also obtained evidence that demonstrates that the above named persons have been conducting illegal investments business from within South Africa.

It finally states that any person who has had investment dealings with AIMSL (the operating company for Mr Steele) since 1 July 1999 should contact Enforcement.

Danske Bank’s guys on the Costa del Sol should have stayed off the sangria when conducting their due diligence on their appointed representatives because, as a result, they ended up engaging the services of one pseudo-financial advisor on an arrest warrant, who was warned to never operate in Jersey, and a further gentlemen, Mr.Graydon, who together with Steele made tens of thousands of euros from selling tax-evading equity-release under the auspices of Danske Bank (although the former was only confirmed to be an expert in “fiscal and accountancy advice and signatory to Introducer/Referrer agreements with a number of highly regulated international banks that offer loan facilities on Spanish located property which can be used for a number of purposes such as equity release”, Mr. Graydon dixit.)

I wonder if Mr. Steele and Mr. Graydon and, by extension, Danske Bank and all other Equity-Releasers (Nordea, Nykredit/Sydbank, Rothschild, etc.), even realized that by encouraging their clients to sign these products to avoid IHT they were indeed pushing their inheritors to contemplate committing tax fraud in Spain which, when over €120,000 of unpaid tax per year, could trigger a conviction of up to 5 years imprisonment and a fine of up to 6 times that of the sum defrauded.

If we read articles 12 and 13 of the Inheritance Tax Act, it clearly stipulates that charges such as mortgages that don’t entail the reduction of the value of the property are not deductible, even though the debts these mortgages guarantee may be deducted if they are real. But which debt, if the money was supposed to be sitting in an offshore account?

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By the Skin of the Teeth: Property Auction Instigated by Danske Bank Halted

June 11th, 2011

Note: This is a repost of


My client has had a narrow escape: having been notified in early March by the courts that his property was to be auctioned byDanske Bank, at 11:00h of the 8th of June 2011, we managed to obtain from the same court a ruling suspending the auctionexactly…24 hours before (just like that one last call from the Alabama Governor…)

And prior to this, on the 27th of May 2011, that is, just a few days before the auction, we are advised, through the courts (Document in PDF), that, unbeknownst to him, my client did indeed have €126,946.64 with Danske Bank, in some account in Luxembourg, which is what he had been wiring to them, over the years, to attempt to placate them and avoid being kicked out of his retirement home bought with his life-savings. One can only imagine the topnotch service Danske bank provided my client once they had abandoned Spain, not before trying to repossess a few homes in its wake. Danske Bank had all but forgotten about this money until the very end, and they have the cheek to say that the debtor had paid up this sum when, as a matter of fact, it had been blocked for years.

So if it was not enough stress, we added that extra bit to it by, unwillingly, choosing the latest of the possible dates (other than tomorrow) to set aside the sale at public auction instigated by Danske Bank against a 73 year-old retired mariner victim of an equity-release, who had been conned into believing that, by going with the biggest Bank in Denmark and contracting what is effectively a tax-evading financial product on his unencumbered retirement home, he would have a monthly payment coming his way, pretty much all the inheritance tax his daughters would be hit with waived or wiped out and all of it, without risking anything (apart from his home, his health and, potentially, his two beautiful daughters’ freedom, as they would have been eligible for prison sentences to be served at Alhaurin prison, 10 minutes’ drive from the foreclosed home, had they followed Danske Bank’s careful tax planning).

The Judge had no choice but to suspend the auction as, alongside these foreclosure proceedings claiming approximately €845,000 (which is what Danske Bank’s clever and optimized investing has lost, or rather, in my opinion, allegedly misappropriated), a criminal complaint had been lodged in Mijas against CEO Peter Staarup and his sales guys once based on the Costa del Sol, including an unregulated IFA hired by the bank.

These are some the promises made by Danske Bank on its prospectus:

  • Exempt from Spanish Inheritance Taxif the beneficiaries, on the death of the insured, are not residents in Spain, the capital will not be liable to Spanish inheritance tax.
  • Investment Strategy: CAUTIOUS

If this is what the HMRC thinks about tax-avoidance schemes, what would they say about the Danske Bank Tax-Evasion Capital Assurance product?




CNMV responds to an initial info request

June 6th, 2011

The Spanish regulator, the CNMV, has answered a petition on information that was made about 1 month ago. From it, we can conclude that:

  1. Danske Bank´s Capital “Assurance” product did not get clearance to be offered to investors based in Spain. We are waiting for an answer from the Insurance regulator (DGS).
  2. Nykredit Realkredit is regulated in Spain and obtained clearance to offer a product labelled “Euro-denominated perpetual hybrid core capital notes”. Sydbank, with whom investors signed their contracts, is not.
  3. The IFA: no sign of the gentleman although he seems to have clearance to act on behalf of “Caser” Insurance, on an exclusive basis, to offer a number of insurance products. No trace of having authority to sell Danske Bank products. He certainly is not authorized to sell any financial service or product.
  4. Rothschild: Registered with the CNMV but need to be more specific although, since they were selling the Aspect Policy, this will be for the DGS to advise on.


  • Scanned pdf of the response from spanish regulator to initial enquiry here (400 Kb.)

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Nordea Life & Pensions Also Part of the Equity Release Rip-Off

June 1st, 2011

It does not cease to surprise me how have Scandinavian banks taken a liking for English money. In this instance, we now find out that Nordea also roamed the Costa del Sol in search for the cherry-pick British unencumbered-property owners to wreak havoc in the finances of otherwise hard-working retirees.

In this instance, in respect of other Skandi banks and Rothschild, Nordea basically followed suit with the lies:

  1. No inheritance tax for the children.
  2. Monthly cash in the pocket of the subscriber to the miracle product.
  3. Full protection granted to the property serving as collateral security.

But also:

  1. Blatant contempt for the Spanish regulatory/supervisory bodies, the CNMV and the DGS (even though the latter gets mentioned as the venue to place a complaint), as this product was not registered with them (it appears they tried to register it with the FSA but were fobbed off). In turn, they chose to go regulated via the Luxembourg “Commissariat aux Assurances”, in the Grand Duchy of Luxembourg. They then say that the laws of the country of commitment (Spain) would be applicable, but also mentions that the national law where this person is resident would be applied in the first instance.
  2. Blatant contempt for Financial, Civil and Consumer Protection legislation.
  3. Unintelligible contracts.
  4. Utter unsuitability of the product sold to the profile of the “victim”.

Interestingly, the second thing one reads when reading the paperwork supplied by in 2004 Nordea is a mention to excluded risks, “suicide“: is this foresight, or just an available option in view of the performance effectively achieved by the fantastic product?

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