Strasbourg ruling on BES victims lets State off the hook

 In Banks, Justice, News

A ruling from the European Court of Human Rights says that the Portuguese State is not responsible for the hundreds of small savers who ploughed their life savings into supposedly safe Banco Espírito Santo products, only to lose everything when the bank collapsed in 2014.

It means that the State will not have to pay out compensation to the victims, many of whom were elderly Portuguese overseas ex-pat residents.
BES sold financial products to small investors that it presented as risk-free, only for the investors — some of whom invested their life savings — to lose everything.
The court ruled that while the bank had committed fraud by advertising the products as risk-free when they were in fact highly speculative, states are under no obligation to cover the debts of private entities.
The court was ruling on the case of a Portuguese pensioner living in Germany who lost his life savings after being persuaded to invest in BES financial products — the judges considered the resolution of BES by the Bank of Portugal struck “a fair balance between public interest and property rights”.
The pensioner’s case was rejected, effectively meaning that any other BES clients who also lost money because they invested in the bank’s bonds can expect the same outcome.