Norwegian bank Norsk DnB Nor (DNB) has lost its case in the Norwegian Supreme Court against investor Ivar Petter Røeggen, after a unanimous ruling by the 11 judges.
DNB has been order to pay Røeggen NOK230,000 (€30,400) plus interest within two weeks and will also have to cover legal fees of NOK4.76m (€630,000).
The case, which involved two loan-financed structured products on which the investor lost NOK230,000 was being heard for a third time in the Supreme Court during February, after two hearings in the autumn.
At the Supreme Court on Friday, First Justice Ragnhild Noer concluded that the bank should have informed the investor that stock market developments are uncertain as well as explain the risks of the products and the consequences of their being loan-financed.
Noer pointed out that the information provided should have been adjusted for non-professional investors such as Røeggen, and ruled that the documentation also contained errors.
Although the Supreme Court did not see any problem with the products themselves to make the agreement invalid, the lack of information supplied to the investor was crucial in its reaching its decision.
There are currently 2,000 cases in Norway that are awaiting the outcome of this court case and media reports estimate that a ruling in favour of Røeggen could cost Norwegian banks NOK500m (€66m).
The case reached the Supreme Court in Norway in November 2012, following a number of hearings that started in 2009 when the Norwegian Consumer Council announced that it would provide Røeggen with financial and judicial support in order for him to take the bank to court.
To read the full court ruling (in Norwegian), click here.