Spain may offer financial aid for stamp fraud victims

12th May 2006, Comments 0 comments

12 May 2006, MADRID — The government is considering offering financial aid to the hundreds of thousands of private investors affected by a Spain's biggest fraud scandal.

12 May 2006

MADRID — The government is considering offering financial aid to the hundreds of thousands of private investors affected by a Spain's biggest fraud scandal.

Deputy prime minister María Teresa Fernández de la Vega said it was studying ways to offer financial help investors who may have lost savings in the alleged EUR 3.5 billion investment fraud involving two stamp dealing companies Fórum Filatélico and Afinsa.

The move came as the nine executives of both companies, who were arrested in connection with the case, appeared in court on Friday to answer charges of fraud, money laundering, criminal insolvency, tax evasion and embezzlement.

At present investors in collectibles companies are not covered by the same safeguards as those who investment in mortgages or other financial schemes.

This is because neither company is classed as a financial institution in the same way as a bank or building society.

They are classed simply as brokers or dealers.

It means up to 350,000 investors may lose savings totalling up to EUR 3.5 billion.

Both companies were said to be bankrupt when the anti-corruption prosecutor presented a case against the companies in court on Thursday.

Fernández de la Vega said it was essential to clarify who has been hit by the scandal and how much they may have lost.

She added the judicial process was likely to make clear if they can get back any of their savings.

The government is also studying how to change the law to make dealing in collectibles a more secure investment.

[Copyright EFE with Expatica]

Subject: Spanish news

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