Landsbanki
"Action Group"

OMM is aware of an action group which is taking legal action against Landsbanki Luxembourg S.A. (LL) and various financial advisers in Spain.

OMM is aware that LL was marketing a version of their arrangement through unregulated advisors in Spain and the possibility exists that these arrangements have been mis-sold.

As far as any LL arrangements through OMM are concerned, we would like to point out the following:

1. OMM, LL and other lenders all took legal advice on the effectiveness of the arrangement for IHT reduction purposes and were all told that it would work, albeit that no “blanket” confirmation could be given because, unlike the UK for instance, Spain does not operate under “common law” but under Napoleonic Law and so “precedence” does not exist, with each case being judged on its own merits. However there have been quite a few cases where the IHT savings have applied and, to date and to the best of our knowledge, there have been no cases where it has failed to work. Nevertheless, OMM’s paperwork always stated that the tax benefits were based on OMM’s understanding of tax law and that clients should always seek independent legal advice.
   
   
2. Residents and Non-residents of Spain are allowed, under EU law, to borrow freely from any bank based in another EU country. The lending bank was Landsbanki Luxembourg not Landsbanki Islands and therefore the lending arrangements were within Spanish law.
   
   
3. All investments made through OMM are fully licensed and regulated by the Spanish authorities. In the case of LL, these investments are through Lex Life & Pensions who are fully regulated in Spain.
   
   
4. OMM made it quite clear, both verbally and in writing many times before the clients actually committed themselves, that investment returns were NOT guaranteed and there was no certainty that interest repayments would be covered by the investment returns. OMM also went to great lengths to point out the other potential pitfalls and their consequences and asked clients to complete documentation confirming that these risks had not only been explained to them, but that they understood and accepted these risks.

If any OMM client would like to discuss these matters further, please do not hesitate to contact us.