Greek sovereign bonds haircut and the liability of the banks
The Greek sovereign bonds haircut and the unilateral postponement of the settlement fo the remaining dues by the Greek State to much later days has been in many cases taken the judicial way of ruling whether the State was enabled to do such a unilateral action in spite of its initial agreement and whether the liability of the State remains withheld towards the investors who chose to buy these State bonds based on an initial agreement that is no longer valid.
Those products were however sold to the market to private and institutional investors alike by several commercial banks and other financial traders. Such sale of financial products in Europe must follow stringent European Union rules as to who and under which conditions one can sell such products. The buyer has also to fulfill a specific profile and the whole procedure must be in full compliance to the European Union directives MIFID I & MIFID II. Such requirements in many cases have not been fulfilled. The banks eager to get their commission and in some cases to get rid of these products have sold them to their clients often overlooking the requirements of the MIFID disposals and without bothering to explain to their clients the risks attached to such movements, unjustifiably putting them into a considerable exposure and this often after the beginning of the Greek debt crisis.
This situation is not radically different from the sale of the Lehman Brothers bonds where the liability of the selling banks was widely admitted –directly or indirectly- in many places around the world thus forcing the selling banks to reimburse serious amounts to their clients that were stuck into the Lehman Brothers bonds. Our Law firm has then succeeded in a major out of Court settlement one of the best scores in the world for its clients on a dispute with a major international bank. The striking similarities with the current situation of the Greek Sovereign debt bondholders that have suffered considerable losses has lead us to initiate a similar tactic towards the selling banks. We are therefore preparing a broadly based joint claim on behalf of Greek bondholders versus the banks that sold such bonds and now they should assume their responsibilities and pay for their mistakes to the Greek bondholders. For more information on such actions please fill up our contact form on this website and you will be contacted promptly.