Goldman Sachs Group Inc. (GS:US) was sued by Singaporean wealth-management client Oei Hong Leong over a $34.3 million loss on Brazilian real-yen options trades he claimed the bank misled him into making.
Oei accused the New York-based bank of fraudulent misrepresentation, breach of fiduciary duty, fraudulent inducement and unjust enrichment in papers filed yesterday in New York state court.
Goldman Sachs rejected allegations that it acted improperly or cheated him, according to a letter it wrote to Oei in July and filed in a Singapore court, where the businessman is suing a unit of the bank over the same loss. The bank has said it will defend that lawsuit, which it is seeking to halt in favor of private and confidential arbitration.
“A lot of clients are like me, they trust the big banks like they trust their doctors,” Oei, 65, said in an interview today. His friends have had similar experiences and he is suing for “justice and fairness” for all clients, he said.
Andrea Raphael, a spokeswoman for Goldman Sachs in New York, said Oei’s lawsuit is without merit and will be defended.
Oei said in the New York lawsuit that he cut dealings with Goldman Sachs in 2011 after it profited on a losing trade it persuaded him to make. He said he resumed transactions after senior executives including President Gary Cohn and Asia head David Ryan visited him in April 2012 and said his interests would be placed first.
Oei said he relied on claims by Mats Dewitte, Goldman Sachs’s executive director for fixed income, currencies and commodities in Asia, before betting on May 15 the Japanese currency would fall against the real.
The bank had claimed the real was a stable and liquid currency anchored to the U.S. dollar, he said.
The real has fallen 12 percent since May 1 against the yen, the worst performer among 16 major currencies tracked by Bloomberg. The Brazilian currency dropped to a four-year low in June after the U.S. Federal Reserve said it may moderate bond purchases that have fueled demand for emerging-market assets.
Oei in 2009 settled a claim against Citigroup Inc. over S$1 billion ($797 million) in trading losses.
The Indonesia-born businessman, who made S$7 million trading American International Group Inc. shares in September 2008, in October that year predicted the global credit crisis would worsen because European banks would falter. A day after his remarks, then British government said it would inject 50 billion pounds ($81.2 billion) into the nation’s banks to keep them from collapsing.
“Trading is like the casino, sometimes you win, sometimes you lose,” Oei said.
The case is Oei v. Goldman Sachs Group Inc., 161176/2013, New York State Supreme Court, New York County (Manhattan).
To contact the reporters on this story: Andrea Tan in Singapore at firstname.lastname@example.org; Chris Dolmetsch in New York State Supreme Court in Manhattan at
To contact the editor responsible for this story: Douglas Wong at email@example.com