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REFILE-EU backs compensation claim over Bankia's 2011 IPO

(Clarifies in paragraph 8 that Caixabank, which now owns Bankia, declined to comment)

MADRID, June 3 (Reuters) - Institutional investors are entitled to claim compensation for money they lost in Bankia’s ill-fated listing in 2011, the European Court of Justice (ECJ) said on Thursday.

The binding ruling, following a request for clarification from Spain’s Supreme Court, confirmed a similar opinion of the ECJ in February which said institutional investors should be able to claim for lost investments.

On Thursday the European court ruled that liability action for information contained in a public offer prospectus covered not only retail investors but also qualified investors.

However, it also said EU directives allow national courts to take into account different levels of expertise and knowledge between retail and institutional investors.

“Qualified investors, due to their level of expertise, usually have, by contrast, access to other information capable of informing their decision-making,” it said, adding that any future ruling should uphold the principle of equivalence between EU and domestic law in similar cases.

Less than a year after Bankia’s IPO raised 3.1 billion euros in an offer split 60/40 between retail and institutional investors, the lender restated a 2011 profit of around 300 million euros to a 3 billion euro loss.

Spain’s top court, which in previous rulings acknowledged that Bankia’s initial public offering contained “serious inaccuracies as to the true financial condition”, wanted to know if it should distinguish between qualified institutional investors and retail shareholders.

Bankia has since been bought by Caixabank, which declined to comment on Thursday. The deal created Spain’s biggest domestic lender.

As part of separate civil proceedings, Bankia has already paid retail investors around 1.9 billion euros in compensation relating to losses they sustained in the IPO.

Several institutional shareholders have also taken legal action against Bankia, with claims for around 30 million euros, a source with knowledge of the matter said.

Bankia said in September that any litigation risks stemming from the IPO had been factored into the Caixabank tie-up.

Shares in Caixabank were 0.2% lower, while Spain’s leading index Ibex-35 was down 0.7%.

$1 = 0.8245 euros Reporting by Jesús Aguado; additional reporting by Emma Pinedo; editing James Mackenzie, Kirsten Donovan

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