A father-and-son duo are suing Clariden Leu, a private banking unit of Swiss banking giant Credit Suisse, in Singapore for S$896,871.18 (Dh2.62m) in losses incurred when, the duo claim, the son was still a minor and legally too young to trade.
The duo argue that the Credit Suisse unit was fully aware that the son was a minor in 2007 when, aged 20, he traded in MSCI Singapore Free Index (SiMSCI) futures contracts, which bet on the future direction of the SiMSCI stock index.
Ian Ow and his father Ow Weng Fye are seeking a refund of the losses from Clariden Leu and their former banker Aaron Chwee in a lawsuit filed at the Singapore High Court.
According to the Straits Times, the duo has accused the banking unit of not taking adequate steps to void the trades despite being aware that the son, who was responsible for the trades, wasn’t legally authorized to carry them out and that the trades were carried out without the consent of the father.
“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,” the lawsuit alleges.
In its defence, Clariden has contended that both father, who was a former executive director at Millennium Securities in Singapore, and son were “sophisticated and knowledgeable investors.” The bank has also contended that, according to the law in Switzerland (where Credit Suisse and Clariden Leu are headquartered), Ian Ow wasn’t a minor at the time of those trades.
In Singapore, however, where the trades actually took place, the legal age for entering into contracts, such as trading shares was 21 in 2007. It became 18 for most contracts, including trading shares, only in 2009.
The father-and-son duo has alleged in court that the Clariden Leu official “negligently or falsely represented to Ian Ow that Clariden had in place systems that would be able to tell when exactly to make trades such that the trades would be profitable and risk free”.
A closed hearing is scheduled for next month.