1. Internal Expert Network: The pool of Independent Directors, Advisory Board members, and external experts that a bank must have to satisfy Fit & Proper and collective suitability under Law 10/2014 on Regulation, Supervision and Solvency of Credit Institutions and Banco de España Circular 2/2016.

2. External Commercial Expert Networks: Firms like GLG, AlphaSights, Third Bridge that connect hedge funds / banks with industry experts for consultations. This is the high-risk area for Market Abuse Regulation EU 596/2014 (MAR) and Art. 285 Spanish Penal Code on insider trading.

Spanish banking governance is unique because supervision is split: ECB / SSM + Banco de España (BdE) for prudential and fit & proper, and CNMV for market conduct and insider dealing.

1. Regulatory Framework for Expert Networks in Banks

A. Fit & Proper and Governance:

• Law 10/2014, Art. 24-29 and RD 84/2015: All board members, Senior Officers, and Heads of Internal Control must be registered in Registro de Altos Cargos at BdE. They must prove: commercial and professional honorability, knowledge, experience, and time commitment.
• BdE actively sanctions for this. Example: BdE published sanctions for "serious infringement consisting of non-compliance with fit and proper requirements and failure to register in the Senior Officers Register" under Law 10/2014. If a bank uses external experts as shadow directors without registration, it's a sanctionable offense.
• CNMV Good Governance Code 2020: Recommends majority of external experts must be independent, and banks must disclose expert network contracts, fees, and conflicts.

B. Market Abuse and Expert Networks:

• Royal Decree Law 19/2018 transposing MiFID II + MAR: Any expert consultation that transmits inside information is market abuse.
• CNMV Circular on expert networks: Bank must have Chinese Wall, Expert Network Policy, pre-clearance, transcript recording, and ban on consulting experts who are currently at supervised entities with access to unpublished results.

2. Why Expert Networks Are a Governance Problem in Spain

After the Cajas crisis (2007-2012), Spain learned that boards full of politically appointed non-experts caused failure. The FSB peer review noted Spain had to "enhance the regulation, supervision and governance of savings banks (cajas)". The solution was Law 10/2014 that forces banks to prove collective expertise.

At the same time, banks as users of commercial expert networks face CNMV/ECB scrutiny:

• Insider information leakage from bank to expert network client
• Reverse leakage: Bank employee uses expert network to get non-public info on a client

3. Detailed Case Laws

CASE 1: The Bankia IPO Fraud - Failure of Expert Governance

STS 23/2016 and 24/2016, Civil Chamber, Supreme Court - Bankia S.A.

The Supreme Court ruled Bankia's 2011 IPO prospectus contained "serious inaccuracies" that led investors into error. Two couples who invested €20,868 and €9,997 were declared null.

Governance Link: The report by two inspectors of Banco de España was key to the ruling. The Board, including external financial experts, signed off on accounts that did not reflect true situation. The Court said the fiduciary nature of the relationship requires expert diligence.

Later criminal branch: STS 2021 - Rodrigo Rato case. Former IMF Managing Director and Chairman of Bankia sentenced for continued asset misappropriation and fraudulent administration while heading Bankia. He used "opaque credit cards" for undeclared expenses. The Court said external experts on Audit Committee failed their oversight duty.

Lesson for Expert Networks: An expert director cannot claim ignorance of accounts. Duty of due diligence under Art. 225-226 LSC.

CASE 2: Banco Popular Resolution - D.E. v Banco Santander (CJEU C-687/23)

Banco Popular Español was Spain's 6th largest bank with €147 billion assets. On 6 June 2017, ECB declared it failing or likely to fail and it was resolved - capital written to zero and sold to Santander for €1.

Spanish Supreme Court referred to CJEU: Can shareholder who sued for nullity of subscription before resolution still claim?

CJEU Judgment 11 Sept 2025 (Banco Santander - Resolution of Banco Popular III) held that actions remain enforceable under Bank Recovery and Resolution Directive 2014/59, but shares that were written down become worthless.

Governance Link: Banco Popular's Board relied on external expert valuations and audit reports that concealed massive NPLs. ECB Supervisory Board later said fit and proper assessment of Popular's board was flawed - collective expertise on risk management missing. This led to BdE Circular 2/2016 reform.

CASE 3: Banco Santander AML Sanction - Transfer of Expert Liability

Supreme Court Administrative Chamber - Banco Santander 2026

The Court dismissed Santander's appeal and upheld penalty imposed for several serious breaches of the law on the prevention of money laundering. Santander argued that after merger by absorption of Banco Popular, it should not inherit liability.

Court ruled administrative liability transfers in merger. Important for expert networks: Compliance expert function (AML expert) cannot be outsourced without retaining liability.

CASE 4: Insider Trading via Expert Networks - SEC v. Santander Executive

SEC charges two traders in Spain with insider trading - Banco Santander (2010)

SEC charged Cedric Cañas Maillard, executive advisor to Banco Santander's CEO, for learning confidentially that Santander was advising on acquisition by BHP. He allegedly traded via expert network channels.

Under Spanish law, this falls under Art. 285 Penal Code: whoever acquires financial instrument using inside information when profit exceeds €500,000.

This is classic expert network abuse: Bank executive is the expert who leaks.

CASE 5: CNMV Insider Trading Fine - El Confidencial Case 2024

National Court upholds €15,000 fine for journalist Agustín Estructura, deputy director of El Confidencial, for buying OHL shares while in possession of privileged information. CNMV classified it as "very serious" under Article 282.16 of Securities Market Law.

While not a bank, the doctrine applies to banks using expert networks that include journalists/experts with access to deal information. CNMV considers tip from expert as privileged info.

4. Compliance Framework for Spanish Banks Using Expert Networks

If you are a bank in Spain using or providing expert networks, you need:

1. Registro de Expertos: Document all external experts advising Board committees (Risk, Audit). File with BdE Senior Officers Register if they have de facto decision power.
2. CNMV Market Abuse Protocol: Pre-clearance form: Is expert currently employed by listed company? Does he have access to inside information? Mandatory 30-minute delay transcript + compliance chaperone.
3. ECB Fit & Proper Questionnaire: For every independent expert director, prove banking expertise under EBA Guidelines EBA/GL/2021/06.
4. Chinese Wall between Corporate Finance and Expert Network Desk - SEC Santander case shows personal liability.

Failure triggers dual sanction: BdE for prudential (Law 10/2014 up to 5% turnover) and CNMV for market abuse (LMV Art. 282 very serious infringement up to €5M).