In order to preserve and increase the value of wealth, purchases are made on behalf of banks.Financial product, never wanted to lose more than 100,000 yuan, Mr. Hu to this bank to court. Recently, Shanghai No. 1 Intermediate People's Court has concluded the second instance of the dispute over property damage compensation and has found that the bank is on the agency's behalf.Financial managementDuring the product process, the company did not abide by the appropriate promotion obligations and there was an infringement fault. The bank was found to have indemnified Mr. Hu for a total loss of more than 180,000 yuan in principal.
Claims $180,000 and interest
In March 2011, Mr. Hu subscribed to the bank's fund products on behalf of the bank. In the delivery of 1 million yuan subscription money, Mr. Hu signed the fund transaction receipts and confirmed that the following records: "I fully aware of the risks of investing in open-end funds, voluntary handling of bank agency funds business, own investment risk," and Sign below the Risk Warning Letter on the back of the transaction receipt.
Later, due to the loss of the fund's products, Mr. Hu filed a lawsuit with the bank as the defendant and the fund company as a third party and demanded that the deciding bank should compensate the loss of more than RMB 180,000 and interest during the investment period.
During the trial, the bank confirmed that Mr. Hu had not conducted a risk assessment during the sale of competing financial products. However, prior to the battle for wealth management products, Mr. Hu had done a risk assessment at the bank. The assessment result was: Mr. Hu's risk tolerance rating and the products suitable for purchase were robust.
The court of first instance has held that the bank has fulfilled its reasonable risk disclosure obligation as a sales agency for wealth management products. Mr. Hu’s signing of the contract shall be deemed as having read and understood the contents of the contract text. As an investor with multiple experiences in investment wealth management products, Mr. Hu shall be able to predict the degree of risk of competing financial products and the resulting investment. Losses should be borne by themselves. The first-instance decision rejected all appeals.
Mr. Hu refused to accept the verdict and appealed.
Only supports compensation for principal losses
The second instance of Shanghai No. 1 Intermediate People's Court held that according to the Provisional Measures for the Administration of Personal Banking Business of Commercial Banks and the Guidelines for Risk Management of Commercial Banks' Personal Wealth Management, banks have the ability to bear risks in accordance with their risk tolerance in the legal relationship of financial services. Financial status and other obligations to promote suitable products. Although Mr. Hu signed and confirmed the relevant risks, he could not exempt the bank from the pre-contractual assessment and proper promotion obligations. Mr. Hu is a stable investor with poor risk tolerance, but the bank violated the principle of “selling the right products to the right investors” and sold the relatively high risk products to Mr. Hu. Therefore, Mr. Hu’s The loss is mainly faulty.
In this case, Mr. Hu should also have a corresponding understanding of his financial status, investment ability and risk bearing capacity. However, he did not make reasonable investment in accordance with his own situation, but chose to purchase competing wealth management products, which also has a corresponding loss. Corresponding faults, according to the corresponding provisions of the Tort Liability Law, the bank’s liability for infringement can be reduced accordingly.
Therefore, Mr. Hu’s request for compensation from the bank for damages to his principal can be supported, and claims for compensation for interest losses are not supported. The second trial commuted and sentenced the bank to compensate Mr. Hu’s entire principal loss of more than 180,000 yuan, dismissing the remaining claims.
Banks should perform their duties of proper assessment and proper referral
Jin Cheng, the trial judge of the second instance, held that in this case, the bank had failed to assess Mr. Hu before he proposed to rush for financial products to Mr. Hu. The bank’s assessment results showed that Mr. Hu was a stable investor and risk-tolerant. Weak ability, generally only hope that we can have value-added income on the basis of guaranteeing the safety of the principal, and arguing that wealth management products are non-guaranteed type of wealth management products. There is a possibility that the net value will fall. It is obviously not suitable for Mr. Hu, but the bank still takes the initiative. Mr. Hu's recommendation can be considered as a fault for the bank that failed to perform the above-mentioned correct assessment and proper referral.
Judge Jin Cheng also pointed out that in the general business practices, the principle of the buyer’s responsibility and risk should be followed. However, in the legal relationship of financial services, there is an objective mismatch between investors and financial institutions such as professionalism and information volume. Investors, as the subjects lacking professional knowledge, do not of course know which financial products are most suitable for their own needs. In pursuit of maximizing profits, investors may often choose inappropriate financial products.
In order to compensate for such inequalities, professional financial institutions should be obliged to meet corresponding obligations and require financial institutions to assume the responsibility of initial selection of financial products for investors, so as to avoid unnecessary losses caused by investors' lack of professionalism. It can prevent financial institutions from pursuing their own interests, inappropriately introducing unfavorable investors into the capital market, and disregarding investors’ rights and profits.