Jan. 30 (Bloomberg) -- Credit Suisse Group AG’s private banking unit Clariden Leu induced a 19-year-old minor to make risky trades in futures contracts and should be liable for the losses incurred, according to a lawsuit filed in Singapore.
Ian Ow and his father Ow Weng Fye sought to recoup S$896,871 ($715,607) from Clariden Leu and their former banker Aaron Chwee in a lawsuit filed at the Singapore High Court. A closed hearing is scheduled for next month.
“The trades were carried out through the instigation of Chwee without any consultation with WF Ow,” the Ows said in their lawsuit. “Clariden did not take reasonable care as any prudent bank would have.”
Ian Ow, who was considered a minor under Singapore law when he traded in Singapore MSCI futures contracts in 2007, was convinced by Chwee that Clariden had the systems in place to make trades which would be profitable and risk free, according to court papers. The age of majority in Singapore for purposes including voting is 21. It was lowered to 18 for entering most contracts in 2009.
Adrian Tan, the Ows’ lawyer, declined to comment as did Chwee. Clariden declined to comment.
Both father, who was a former executive director at Millennium Securities in Singapore, and son were “sophisticated and knowledgeable investors,” Clariden said in its defense. Ian Ow’s trades are also binding as he was no longer considered a minor under Swiss laws at the time of the trades in question, the bank said.
Ian Ow was financially astute and had been trading in foreign currencies through a leveraged margin account when he and his father opened an account with Clariden in 2006, Chwee said in his defense. His father had also instructed Chwee to take instructions from the younger Ow, the banker said, adding that he had highlighted the risks involved to Ian.
Credit Suisse is integrating its Clariden Leu unit, resulting in 550 job cuts, Switzerland’s second-biggest bank said in November.
The case is Ow Tuc Yun Ian and Ow Weng Fye v Clariden Leu Ltd and Aaron Chwee S752/2011 in the Singapore High Court.
--Editors: Douglas Wong, Joe Schneider
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