Norwegian Bank Claims to Be Victim of Conspiracy
e
This must be the most interesting news story coming out of Scandinaviathis week: TheNorwegianbank,DnB NOR
,who’s been found guilty of selling toxic saving products to
privateinvestors,not revealing the real risk involved, is facing the court again after appealing the firstruling. In its defense, the bank now claims they are the victim of a witch-hunt, and that theallegations are a result of a conspiracy against the bank.
“The majority of facts is conspiratorial in disfavor of the Bank.”
Anders Ryssdal
I guess it could be seen as a sign of desperation when DnB NOR’s lawyer writes in
theappeal paper that the ruling byOslo District Court in June last year is
“conspiratorial in disfavor of the Bank,” and that the choice of words in the verdict shows that the court has decided to “get” the Bank. But it could also be a part of a
sneaky strategy to derail the whole case.
Well, if I was a lawyer, defending DnB NOR, I think I would have chosen a completely different
–
However, as you all know,conspiracy theoriesare always impossible to prove
–
or reject.
And that’s probably what DnB NOR is aiming for; making it impossible for the Borgating Court of
Appeal to reach another verdict in disfavor of the Bank.It is the Norwegian business website,DN.no,who have gotten hold of the appeal papers. A
lawyer Anders Ryssdal at the law firm Wiersholm, writes:
“In general, is the majority of the court’s valuation of the evidence conspiratorial in disfavor of the Bank.”
The bank’s lawyer also argues that the Oslo District Court have chosen to disregard moreconfident calculation made by other experts, including DnB NOR’s own.
Court have revealed through their wording that they more or less had decided to “get” bank before
they made the ruling.The court use words and expressions of an
“odious character,”
the bank-lawyer writes, in order to
create an impression of the DnB NOR’s products as
“suspect.”
“Odious”
means disgusting or cruel. As an example of the conspiratorial, odious wording,
DnB NOR points to the District Court’sconclusion that says the Bank’s sale of these saving funds is to be considered as marketing of
“suspicious products,”
according to a
“carefully thought out plan.”
11 Years of Outhauling
This case started in 2000, 11 years ago, when private investor Ivar Petter Røeggen placed all his
savings in two of DnB NOR’s so
-called structured funds, which according to the Bank wasguaranteed a pay-off.But five years later Mr. Røeggen had lostNOK 230.000 of his original investment of NOK 500.000. And in 2006
–
encouraged by the money magazine “DINE PENGER” –
he files a complaint to theNorwegian Consumer Councilclaiming the Bank had made false promises, and withheldinformation about the real risk involved. According to the calculations by the independent experts, there was a 60% chance of losing
money by investing in DnB NOR’s guaranteed structured funds.
The Norwegian saver requires that DnB NOR cover his losses.Now, the snowball starts rolling:In December 2007 the Consumer Council says in a hearing, held by the Norwegian Financial Authority that it should be prohibited to sell thesestructured productsto non-professionalinvestors.
This becomes the conclusion of hearing, and the recommendation later sent to the Norwegianfinance ministry, in January 2008.The finance ministry complies with the request and makes it into law, March 1. 2008.In January 2009 the national Finance Board of Appeals agrees with Mr. Røeggen, but just acouple of hours after the announcement by the Board of Appeals, DnB NOR makes it clear thatthey will not comply with the decision.In April 2009 the case opens at the Oslo District Court, who in June the same year comes to thesame conclusion as the Consumer Council, the Financial Authority and the Finance Board of Appeals.However, DnB NOR still refuse to accept this view, and appeals the verdict to a higher legal body
–
the Borgating Court of Appeal.
And here we are…
Of Fundamental Principle Importance
According to Norwegian mass media there are about 2.000 other private investors who have lost
money by placing their savings in the same “guaranteed” funds as Ivar Petter Røeggen.
They are eagerly waiting for a final verdict
–
if Norway’s partly state
-owned bank is forced tocover the losses of all these people, it could result in a double-digit billion loss for DnB NOR.
At least, that’s what the
Norwegian media, authorities and politicians think.For some reason, they seem to forget that DnB NOR now is the sole owner of the Baltic bank DnBNORD. Up until January 2011, the Norwegian bank owned the Baltic bank in a 50/50 relationship withthe German bank NORD LB- one of Eur
ope’s leading developers and suppliers of structured
financial products.Due to the shady cross-border activity over the last decade, no one knows exactly how many dissatisfied customers that might turn up if DnB NOR loses this case.But it will definitiv
ely be more than 2.000…
International Focus
The law suit against DnB NOR is also being followed closely by the international bankingcommunity.The consequences can be far more widespread than most people think.In the meantime, global banks are scaling down on their dodgy dealing as fast as possible.The BritishFinancial Services Authority (FSA)has advised more financial groups to amend or withdraw adverts as it now begins to cracks down on misleading advertisements, according to thelaw firmReynolds Porter Chamberlain.
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