Supreme Court of Greece holds banks liable for investment advice

The Supreme Court of Greece has issued two rulings (765/2026 and 364/2026) that establish new limits on how banks can disclaim responsibility for investment advice provided through Private Banking services. The decisions emphasize that banks have a duty to provide personalized, clear, and understandable information regarding the nature and risks of complex financial products, tailored to a client's specific financial situation, education, and experience.

In one specific case, the court upheld a compensation award of €140,590.20 for an investor who lost nearly all the capital invested in an Aspis Finance PLC bond. The investor, a retired civil engineer, had been encouraged by bank employees to join Private Banking to achieve better returns. He subsequently purchased a hybrid capital security with a BB credit rating from Fitch via the secondary market.

The court ruled that the risks and characteristics of the product were not adequately disclosed to the investor prior to purchase. Furthermore, the court rejected the bank's defense that it was merely executing orders, determining that the bank had effectively provided investment advice by presenting the product as suitable and safe for a client seeking capital preservation.