Jyske Bank admits it gave bad investment advice
Ruling about that it improperly advised investors is the latest in a string of bad news for Jyske Bank Jyske Bank has acknowledged it gave poor investment advice to some of its clients and agreed they should be reimbursed for...
Jyske Bank has acknowledged it gave poor investment advice to some of its clients and agreed they should be reimbursed for their losses.
The bank admitted to the Danish Complaint Board of Banking Services that it gave less than adequate consulting in five of the cases customers have brought forth.
Over the past several months the bank has been fighting the authorities over its Jyske Invest Hedge Fund Market-Neutral Bonds, which reportedly lost around 800 million kroner in investor funds. The bank has lost several cases with the board over the issue, but has only admitted fault in the five most recently completed cases.
Peter Stig Hansen, head of the bank’s legal division, denied that the admissions in the recent cases were a change in the bank’s position.
‘There’s no news in this matter,’ said Hansen. ‘We assess cases individually, and in these cases we came to the conclusion that we risked losing them if you judge them with an ordinary burden of proof.’
Jyske Bank has refused to follow rulings from both the complaint board and the Consumer Ombudsman, who have instructed it to hand over all documentation regarding around 10,000 customers’ hedge fund investments.
Earlier conclusions from the Financial Securities Authority found that the sales material used to sell the fund was ‘contrary to honest business practices’ and did not accurately reflect the true risks involved.
Based on that assessment, the complaints board has reversed the burden of proof in the cases so that it is the bank that must demonstrate it has provided comprehensive and accurate advice.
Jyske Bank’s legal staff is presently considering the Consumer Ombudsman’s interim recommendation to extend their deadline for handling customers’ reimbursement claims.
In addition to the cases being considered by the complaints board, Jyske Bank is facing a lawsuit filed by a group of 1,000 investors who lost around 360 million kroner and was also recently fined 12.5 million kroner by Spain’s banking authorities for violating money laundering regulations at its Gibraltar branch.