Singapore’s court of appeal has decided that a wealthy family can sue one of Credit Suisse’s trusts as the city-state has jurisdiction over the matter, as reported by FSA‘s sister publication, International Adviser.
Bidzina Ivanishvili and his family have brought a lawsuit against the Swiss bank for at least $300m (£238m, €262m), according to a Bloomberg report.
They are the biggest victims of Patrice Lescaudron, the bank’s former star wealth manager, who was convicted in Geneva in 2018 of forging signatures and faking trades to cover client losses, including Ivanishvili’s.
He told the court that his actions were driven by “fear” over how his wealthy clients would react to the losses. He was sentenced to five years in jail.
Credit Suisse has subsequently been accused of failing to act in good faith and in the best interest of the beneficiaries, by neglecting to do proper due diligence on how the investments were managed.
Left in the dark
According to Bloomberg, the lawsuit says that the Credit Suisse Trust’s records show its Meadowsweet fund as having a value of $307m at the end of 2014, but a presentation from the bank three months later showed it had jumped 43% to $439m.
Ivanishvili’s lawyers said the bank ought to have been aware of how wrong the presentation was; and that, if their clients would’ve been made aware of the true investment position, they could have taken steps to reduce their losses.
Lescaudron’s fraud was only discovered in September 2015, when the shares in a company called Raptor Pharmaceuticals plummeted.
He had built up a significant position in the stock on behalf of Ivanishvili, without his or his family’s knowledge.
Credit Suisse Trust said: “The court of appeal’s decision only pertains to the question of jurisdiction. Credit Suisse Trust intends to vigorously contest and defend the claims on the merits.”
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