A businessman from Alicante won a case in a Barcelona court that said the Swiss bank UBS was partially responsible for a fraud that the former manager of one of its offices in the Catalan city perpetrated. The court found that the employee used his friendship and trust with the victim to trick him into investing in a fake power plant, which cost the victim around two million euros. The court says that the bank must pay the victim 1,831,467 euros in damages and compensate the legal fees for the private prosecution initiated by Alicante lawyer Álvaro Fernández Fuertes on their behalf.
The decision also makes individuals who benefited from the fraud pay an extra €247,187. The financial institution has already challenged the verdict, so it is not final.
The ruling says that the defendant, who worked at UBS as a business manager and financial advisor from 2002 to 2008, did what he did with the goal of making money illegally and not following through on the deals he promised. He took advantage of his personal relationship with the businessman for years. They had known each other since childhood and had a profound bond that their families had passed down to them. Over time, this trust grew stronger, and the two families even went on trips together.
The defendant had given him investment advice when he worked at another bank, and they kept this professional relationship going after he became the director of the UBS branch in Barcelona. He then suggested putting €1.8 million into a fake cogeneration plant, which proved out to be a complete lie. The court believes that the plan was prepared with the goal of making the defendant richer at the victim’s expense and that there was no legitimate initiative behind it.
The businessman lent the defendant an additional €830,000, which the defendant asked for knowing he wouldn’t pay it back. This was on top of the unsuccessful investment. The victim lost more than €2.6 million in all. The main offender was sentenced to one year and nine months in jail for fraud and another eleven months for making fraudulent documents. He had made up fake paperwork to hide the fact that the investments didn’t exist. Another defendant was given a seven-month prison sentence for receiving stolen items because she had some of the money that had been taken in her account.
The accused is guilty
Even though both individuals pleaded guilty and the case was settled through a plea deal, the main issue in the legal struggle was whether UBS should be held responsible for what its employee did. The court has decided that it should, since the defendant was acting as a bank representative, within the scope of his advising obligations, and on bank property. The court makes it clear that the trust that the UBS brand built up and the defendant’s position were key elements in the Alicante businessman’s choice to invest.
The bank’s arguments, which tried to blame the investor for being careless, were not accepted by the court. “The victim cannot be held responsible for the deception,” the verdict says, stressing the role that the defendant’s appearance of stability and trustworthiness as an employee of an international financial institution played in the case. The court also said that other letters that UBS said were signed by clients, including one that was supposedly signed by the businessman from Alicante himself, were not real. UBS used these letters to distance itself from the events. The judges decided that “these are just unrecognised and unauthenticated copies” that the bank made on its own just before the employee left, in an effort to avoid any financial responsibility. The court even said that this move was the same as the abusive clauses that case law has repeatedly said are null and void.
The decision says that the defendant departed the bank in 2008. UBS said he departed on his own, while the defendant said he left to avoid going to court. The court’s decision says that the bank must pay for the damages since it benefited from the trust its employee built with clients, even though this was the case.
Full payment
The Barcelona Provincial Court has awarded the entire compensation for the businessman from Alicante at €2,651,467, while UBS will have to pay €1,831,467 as the subsidiary civilly liable party. The rest is what the defendants owe.
This decision ends a long legal battle for the businessman from Alicante. It started more than ten years ago when he found out that the investment idea given by someone he thought was a friend and trusted advisor was completely made up. The court stresses that the defendant’s actions were based on a long-term lie that was carried out in the name of a well-known worldwide organisation, which made the fraud possible.
Author: Derek Appleton
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