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UBS Sued over 77-Year-Old Lady's $26 Million Loss
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Swiss banking giant UBS is being sued in Hong Kong for allegedly duping a 77-year-old woman into buying highly risky derivative investments that cost her nearly $26 million in losses.
Chan Wai-yee, who was born in mainland China, filed a lawsuit Tuesday saying UBS bankers never spelled out the risk and potential losses of investing in leveraged derivative products, known as accumulators, that bet on Hong Kong stocks.
Chan also says the bank led her to sign several documents in English — including one that made her a "professional investor" under local securities regulations — even though she doesn't speak the language and never finished primary school.
The bank never provided her with all the documents in Chinese, the suit says. Chan alleges breach of professional duty and seeks unspecified damages from UBS. UBS spokeswoman Angel Yeung in Hong Kong declined to comment.
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Sharon Lorimer |
According to court documents, UBS entered Chan into 25 transactions involving accumulators between September 2007 and February 2008.
By October 2008, as the financial crisis sent global markets into a free fall, she had suffered losses of more than $200 million Hong Kong dollars ($25.8 million).
UBS told her to sell some of her stocks to settle the debt — and then charged her an unwinding fee of HK$47.3 million ($6.1 million).
The bank later agreed to pay her HK$10 million ($1.29 million) in June following negotiations between the two parties.
Chan started with HK$260 million ($33.5 million) in her account. She has declined to specify how she amassed her fortune.
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