The Norwegian Supreme Court has denied hearing on appeal, and the case, which is of relevance for all Norwegian consumers with similar banking arrangements, has thus reached its conclusion.
The case involved a large number of Norwegian private consumers, who were offered significantly geared investment loans from Sydbank A/S. The loans, to be utilized in the global securities market, were predominately offered as currency loans in Swiss Franc (CHF), and Sydbank had collateral in the customer's capital- and trading accounts. In August 2011, a short but highly volatile shift sent the securities market for a dive, and the CHF, in which most of the loans were denominated, appreciated severely against the NOK. In order to hedge against own losses in the prevailing market, Sydbank, without informing its Norwegian customers, executed compulsory sales of the customers' securities portfolios and made simultaneous exchange of the CHF loans over to NOK.
In effect, the enforcements completely eradicated the customers' equity, and the Court of Appeals found this to be in liable breach of Sydbank's contract with its customers. Conversely, Sydbank was not heard with its defence that a bank can be free its obligations towards customers simply by acting (in this case informing about compulsory asset sales) through designated intermediaries (in this case Norwegian financial advisory firms).