In a judgment dated 21 July 2026 (STS 1230/2026), the Spanish Supreme Court has once again addressed the civil liability of Ernst & Young Servicios Corporativos, S.L. (“EY”) towards investors who suffered losses following the collapse of Let’s Gowex, S.A. (“Gowex”). Four investors appealed to the Supreme Court: three were awarded a combined total of EUR 150,760.51 in respect of the acquisition price of their shares, plus brokerage costs and commissions, and legal interest from the filing of their respective claims; the fourth investor’s claim was dismissed on causation grounds, as he had acquired his shares after the publication of the Gotham City Research report that first exposed the fraud. This decision builds on the Supreme Court’s landmark 2023 judgment (STS 539/2023) and reinforces a clear and now well-established line of case law on the liability of registered advisers in Spain’s alternative equity markets.
Background: The Rise and Fall of Gowex
Gowex was a Spanish technology company listed on the Mercado Alternativo Bursátil (“MAB”, now known as BME Growth), Spain’s multilateral trading facility for small and medium-sized enterprises. The MAB operates as a multilateral trading system managed by BME and supervised by the CNMV, designed to offer growing companies access to capital markets under a regulatory framework adapted to their size and stage of development.
In July 2014, US-based short seller Gotham City Research published a report alleging that Gowex had materially falsified its financial information. Within days, the company’s CEO, Jenaro García, admitted that the company’s accounts for at least the preceding four years did not present a true and fair view. Gowex subsequently entered insolvency proceedings, and its shares became worthless. The MAB published the CEO’s admission as a hecho relevante (relevant fact) on 6 July 2014.
The fraud was reported to have affected around 5,000 retail investors, many with individual investments in the range of EUR 10,000–15,000, in addition to a number of institutional holders. At its peak, Gowex’s market capitalisation stood at approximately EUR 1.4 billion, although management reportedly controlled around 62% of the company’s shares, placing the free float held by outside investors at roughly EUR 550 million.
EY’s Role as Registered Adviser
EY acted as Gowex’s registered adviser (asesor registrado) — a role distinct from that of an auditor, but one that carries significant regulatory responsibilities under the MAB’s regulatory framework. Under the applicable rules, registered advisers are specialised professional firms authorised by BME that evaluate the suitability of companies for admission to the market, accompany them through the listing process and provide ongoing support throughout their time as listed companies. The regulations require every listed company to have a designated registered adviser at all times.
Crucially, the registered adviser’s functions are not merely formal. They include verifying and advising the company on compliance with the requirements for admission, collaborating in the preparation of the listing document (Documento Informativo de Incorporación), supporting the company in meeting its ongoing transparency obligations (including the periodic publication of financial information and timely disclosure of material events), and acting as the primary interlocutor with the market’s governing bodies.
In the specific context of capital increases, the registered adviser was required to submit a report to the market and to declare that the company’s documentation met the applicable standards of “content, precision and quality” and that it did “not omit relevant data nor mislead investors.”
The Supreme Court’s Doctrine: STS 539/2023 and the July 2026 Judgment
The Supreme Court first addressed EY’s liability as Gowex’s registered adviser in its judgment STS 539/2023 of 19 April 2023, in which it awarded compensation to four investors. In that decision, the Court established several key principles:
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Substantive, not merely formal obligations. The Court rejected EY’s argument that its role was limited to advising on and supervising the formal regularity of the information communicated by the issuer to the MAB. Instead, the Court held that the registered adviser was required to ensure that the information met standards of content, precision and quality — and that it did not omit relevant data or mislead investors. These obligations extended to the substance of the financial information, not just its form.
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Duty owed to investors. The information to which the registered adviser’s functions related was not intended exclusively for the internal consumption of the MAB’s governing body. It was made publicly available to investors, who were also its intended recipients. The registered adviser’s duties therefore extended to the protection of investors.
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Failure to exercise the required diligence. The Court found that the fraud committed by Gowex’s management was so blatant — with abnormally inflated results, unrealistic revenue forecasts, undisclosed related-party transactions and repeatedly falsified client and contract data — that a third party based abroad (Gotham City Research), without access to Gowex’s internal documentation, was able to detect it. The persistence of this fraudulent conduct throughout EY’s tenure as registered adviser demonstrated that EY had been negligent in the performance of its regulatory functions.
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Irrelevance of contractual limitations. The Court held that any contractual clause between Gowex and EY purporting to limit EY’s liability to third parties was irrelevant, both because such a clause could not bind parties who had not agreed to it and because the registered adviser could not contractually exempt itself from obligations imposed by market regulation.
In its July 2026 judgment (STS 1230/2026), the Supreme Court reaffirmed this doctrine in full. Of the four investors who appealed, three were awarded compensation. Importantly, the fourth investor’s claim was dismissed: he had purchased 19,300 shares on 2 July 2014 — the day after Gotham City Research published its report alleging that Gowex had falsified its financial information. The Court held that, by that date, the controversy over the reliability of Gowex’s disclosures was already in the public domain, and the investor could therefore not establish a causal link between EY’s negligence and his decision to invest. The ruling therefore highlights the importance of the timing of the investment: investors who acquired shares after the Gotham report became public may face significant difficulties in establishing the necessary causal link between EY’s negligence and their investment decision.
Damages
In line with the Supreme Court’s approach, damages in the Gowex cases have been calculated as the full amount of the investment (the acquisition price of the shares), plus brokerage costs and commissions. As to interest, the July 2026 judgment clarified that, since the claim is for tort damages, EY was not in default (mora) at the time the investors acquired their shares, but only from the date each investor filed their claim. Accordingly, legal interest runs from the filing of the claim, not from the date of acquisition. In addition, the procedural interest under Article 576(1) of the Civil Procedure Act (Ley de Enjuiciamiento Civil) applies from the date of the judgment itself. The Court’s underlying reasoning on quantum remains straightforward: had EY fulfilled its obligations, the fraudulent information would not have been published, Gowex’s shares would not have been traded at artificially inflated prices, and the investors would not have purchased them in the first place.
In a separate set of proceedings, the Madrid Court of Appeal (Section 8) awarded approximately EUR 280,000 to a group of seven investors in November 2025, applying the same principles. Earlier, in 2024, a different section of the Madrid Court of Appeal had awarded approximately EUR 3.25 million to a group of around 130 investors.
Broader Implications
The Gowex litigation has significant implications beyond the specific facts of the case:
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The Supreme Court has now firmly established its approach to registered adviser liability. The Supreme Court has confirmed EY’s liability twice. Lower courts are applying the doctrine consistently. Registered advisers in BME Growth can no longer credibly argue that their role is limited to formal checks.
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A precedent for market integrity claims. The case establishes a clear framework for holding gatekeepers accountable when they fail to detect or prevent fraud in alternative equity markets — even where the gatekeeper is not the company’s auditor.
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Investor protection in growth markets. BME Growth is designed for smaller, expanding companies where the risks associated with investment are inherently higher. The Supreme Court’s doctrine recognises that, in this context, the registered adviser plays a critical role in maintaining the integrity of the information on which investors rely, making its supervisory function all the more important.
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Limitation remains a critical hurdle. The applicable limitation period for tort claims under Spanish law is just one year (Article 1968(2) of the Civil Code). In the successful cases, investors preserved their claims through successive annual extrajudicial demands (burofaxes) sent to EY, which interrupted and restarted the limitation period under Article 1973 of the Civil Code. For any affected investor who has not taken similar steps, limitation is likely to present a significant obstacle — particularly given that over twelve years have elapsed since the fraud was first disclosed.
More broadly, the Gowex litigation illustrates the importance, particularly in jurisdictions with short limitation periods such as Spain, of investors taking early and affirmative steps to preserve and pursue their rights. Litigation funding can play an important role in this context, as it enables investors to take those steps and, where appropriate, commence proceedings without having to bear the associated costs and litigation risks themselves.
Conclusion
The Spanish Supreme Court’s July 2026 judgment represents a further consolidation of a clear and investor-friendly line of case law on the liability of registered advisers in Spain’s alternative equity market. For investors who acquired shares in Gowex before the publication of the Gotham City Research report on 1 July 2014, the Supreme Court has now firmly established the core legal basis for claims against EY. However, two significant hurdles remain: demonstrating that applicable limitation periods have been properly preserved through an unbroken chain of extrajudicial demands, and — as the rejection of the fourth appellant’s claim illustrates — establishing the necessary causal link between EY’s negligence and the investment decision, which requires that the acquisition predated the market’s awareness of the fraud.
Deminor actively monitors securities-related developments and potential investor claims in Spain. Institutional investors with questions regarding Spanish securities matters, potential claims or limitation issues are welcome to contact Paloma Castro (paloma.castro@deminor.com).
