A Portuguese court had slammed Santander and its treatment of a business customer who was pushed into a complicated Swaps contract when all the management wanted was a loan.
The civil court in Lisbon said the €1.5 million fine reflected the 'speculative and illegal’ nature of the financial arrangement.
Pedro Marinho Falcão, the lawyer for the company that had complained said that this was the first time to his knowledge that any bank has been fined such a high amount.
The Financial Risk Management contract, a highly speculative Swaps contract, was seen by the court as "a speculative contract, a gamble, an illegal contract and therefore void."
On a national scale the finance minister, Maria Luis Alberquerque, is continuing her buy out of the various Swaps contracts taken out by Portugal’s publicly owned companies with a range of banks, including Santander. These speculative financial products were set up with the connivance of the previous Socrates administration in a successful attempt to take public loans off balance sheet to improve the look and feel of the nation’s financial situation, leaving the state with up to €3 billion of unforseen liabilities.
