"UBS Sued by Hong Kong Client for Negligence in Selling Products | AboutHK.Com - more information about HK"
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|  Bloomberg
A Hong Kong client sued UBS AG for alleged negligence and reckless misrepresentation in inducing her to buy so-called accumulators that resulted in losses of more than HK$200 million ($25.8 million).
Chan Wai-yee, born in 1932 and unable to read, write or understand English, said the bank represented that the products were a “bargain” and that potential losses were limited, according to a lawsuit filed in Hong Kong’s High Court.
“In light of the ongoing litigation, it would be inappropriate for UBS to comment on the details of the case,” said Mark Panday, a Hong Kong-based spokesman for the bank.
Accumulators are over-the-counter structured products that commit investors to buying stocks at a set price for a specified period. Chan’s contracts were bought between September 2007 and February 2008, according to the lawsuit. She wasn’t informed that the potential losses from the products could significantly exceed any limited gains, the suit said.
“Notwithstanding the wealth she has accumulated through her hard work and her limited experience in dealing with share investments, the plaintiff at all material times only had limited investment knowledge,” it said.
Chan became a UBS client in 2007, following her relationship manager who joined the Zurich-based bank from Hang Seng Bank Ltd., the suit said. She relied on the manager to draw her attention to the effects and consequences of signing any bank documents, including an acceptance that she be treated as a professional investor, the filing said.
Chan transferred HK$260 million worth of shares to her UBS securities account, and “without any request being made,” was granted credit facilities of $15.4 million, the lawsuit said.
The case is Chan Wai Yee and UBS AG, HCA1660/2009, Hong Kong High Court.
To contact the reporter on this story: Douglas Wong at dwong19@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it |
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