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LA VALL D’UIXO, Spain – When Felix Valls followed his bank manager’s advice and invested his entire savings in the bank’s stocks, he did it without thinking.

It was a simple question of loyalty.

After all, how could he doubt the local bank that opened an account for him just after he was born in 1935 with a gift of 5 pesetas, as a sign of respect to his parents, who were lifelong customers? Now the 77-year-old Valls feels betrayed as he finds himself locked out of his hard-earned money.

His plight is shared by thousands of his fellow townspeople and nearly a million across Spain: Lured by the familylike ties nurtured between bankers and customers, they poured their life’s savings into higher-yielding financial instruments recommended by the people managing their money.

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When boom turned to catastrophic bust, they found the stock had become all but worthless.

Once-lifelong friendships have turned to enmity, as victims cry treachery. In some towns, angry customers have burst into bank branches with shotguns and yelled death threats. Despair has set in, as many of the victims are elderly people who were depending on the money for their last years.

In towns like La Vall D’Uixo, bank employees and customers would often have close relationships. But those times are over.

Jose Romero has spent nearly four decades working at Bancaja, a regional savings bank that is now part of Spanish banking giant Bankia. He said relationships with clients have recently become very tense and sometimes have hovered on the verge of violence.

“The client trusts the brand, but the employee even more,” Romero said. “But when you touch their money, people change radically. We’ve seen death threats, insults, people who come in with shotguns.”

Spain’s Confederation of Savings Banks declined to comment on gun incidents at bank branches and said all investors in the bank stock had to authorize purchases by signing contracts containing “brief and nontechnical language” about the risks they were agreeing to take on.

The confederation added in a statement that investments in “preferred stock” were sound when introduced but their value was hurt by market conditions and Spain’s deteriorating economy.

Preferred stock entitles the holder to a fixed-rate dividend, paid before any payouts are distributed to holders of ordinary shares, or common stock. Holders of such preferred stock also rank higher than ordinary shareholders in receiving proceeds from the liquidation of assets if a company goes into court protection.

The country’s financial crisis has already yielded many dark milestones, including 25 percent unemployment and home foreclosures on an unprecedented scale. Add to that the scandal of up to 1 million Spaniards whose money is frozen or has been lost after banks allegedly mis-sold them complicated financial products.

The crisis has hit especially hard in La Vall D’Uixo, about an hour’s drive north of Valencia.

Some residents have been denied access to investments that represent their life savings, while others have found their nest egg has become worthless because of the collapse of share prices. Up to 1,500 families in the town of 34,000 have been affected.

Vincente Porcar is fighting for about $90,000 that his 78-year-old mother, Francisca Molina, inherited when her husband died. Molina said that rather than offering something ultrasafe such as a savings account or a certificate of deposit, the local bank offered them preferred stock in the bank and made it seem like there was a fixed rate with no risk.

So, she signed up and watched the money grow. But there was a catch.

“We wanted to buy a house and when we went to ask the bank for the money,” Porcar said, “they told us we couldn’t touch it.”

That’s because while the preferred stock offered a high 7 percent return, they never expire; therefore, to get rid of them, there must be another buyer. Spain’s dismal economy has sent the value of the shares plummeting, meaning there’s nobody willing to take the shares off the townspeople’s hands. Also, banks faced with toxic loans and near-worthless property on their books can no longer make good on their promise of high returns.

The majority of those affected are small investors like Porcar’s family.

Now, Spain’s government is cracking down on the selling of financial products, but it won’t guarantee that the nearly 1 million cash-strapped Spanish investors will get all their money back. On the other hand, the banks that sold them are the same ones that are benefiting from a lifeline of about $130 billion from the 17-nation eurozone.

The European Union recently announced that nationalized Spanish banks that need such funds from Brussels should convert preferred stock into more-liquid common stock with a discount of around 40 percent, which would mean huge losses for thousands of savers.

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