ARCO case – misled shareholders
Consumers were able to buy shares in a financial cooperative called ARCO which was labelled a safe product. Leaflets referred to it as a ‘risk-free, absolutely safe’ investment. ARCO, in turn, was a shareholder of Artesia, a Dutch bank which merged with a Belgian bank called Dexia in 2001. As a result, ARCO shareholders overnight became the biggest shareholder in Dexia, with a stake of around 15%.
But when Dexia failed in 2011 and needed a bailout by taxpayers, around 800,000 ARCO shareholders found that their savings were now at risk. They were neither consulted nor informed about becoming shareholders of Dexia.
The Belgian government offered a guarantee of up to €100,000 to individual shareholders of ARCO. But, in 2014, the European Commission concluded that the guarantee constituted illegal state aid and ruled against the scheme. Currently the Belgian government is exploring other options to provide at least a partial refund to consumers.