Citi says not responsible for Singapore client’s loss

June 20, 2009
Singapore Democrats

This post is at least a year old. Some of the links in this post may no longer work correctly.

Reuters

Citigroup on Friday rejected a writ by a Singapore private banking client who claimed he lost over S$1 billion ($687 million) because the bank provided inaccurate information and failed to execute some of his trades.

Citi said in a court filing seen by Reuters that businessman Oei Hong Leong “demonstrated a considerable appetite for risk and an understanding of the risk and exposure associated with the various derivative investment structures entered into.”

His open positions with Citi had stood as high as $6.89 billion in February 2008, the bank said.

Many private banking clients lost money in the aftermath of the Lehman Brothers collapse last September that led to turmoil in financial markets.

Citi denied providing Oei with inaccurate and misleading margin numbers, and alleged Oei’s claims of a “meltdown” in its tracking and control systems were “contrived afterthoughts”.

“We intend to vigorously defend the action. We have today filed our defence,” Citi’s private bank said in a statement.

As for Citi’s alleged failure to execute $600 million worth of buy orders for U.S. Treasury bonds placed by Oei, the bank claimed that was because Oei had consistently set his limit prices below the indicative market prices.

Oei’s lawyer, Quek Mong Hua, said Citi’s denial “was not unexpected”, and his team was studying Citi’s defence.

Oei, one of Singapore’s richest men, last month sued Citi, with which he has a 30-year relationship, for negligence and misrepresentation. [ID:nSIN43397]

He alleged the bank repeatedly gave him an inaccurate picture of his trading exposure, which led him to take on more positions than he would have taken otherwise. (Reporting by Kevin Lim; Editing by Neil Chatterjee & Ian Geoghegan)

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSIN31663720090619