<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Couple sue UBS for forex losses
</TR><!-- headline one : end --><TR>Indonesians claim they lost $12.7m on trades in currency derivatives </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
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PHOTO: AGENCE FRANCE-PRESSE
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->AN INDONESIAN couple are suing UBS Singapore for US$8.6 million (S$12.7 million), which they say was lost because of an 'unsuitable' foreign exchange product offered to them by the bank.
Mr Turniady Widjaja and his wife Rosemary, who have been private banking clients of UBS since 2005, lost the money last year on trades in currency derivatives known as accumulators.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>CONFLICTING CLAIMS
Couple say:
</TD></TR></TBODY></TABLE>According to court documents obtained by The Straits Times, they claimed they were told that trading in accumulators was 'simple and flexible' and that 'there would be guaranteed profits', but the product turned out to be 'sophisticated'.
The Widjajas also said they did not receive margin calls from UBS asking them to top up their collateral.
This resulted in the bank 'closing out' their loss-making positions in August last year, a move that wiped out most of the assets in their roughly US$10 million account.
Mr Widjaja is a managing director of an Indonesian firm that deals in textiles and construction, among other things.
He said that he left school in his first year of secondary education and has only a limited grasp of spoken and written English.
In its statement of defence, UBS said that all transactions in connection with the couple's accounts were made by them or their authorised representatives, with the Widjajas' knowledge and consent.
It said the Widjajas signed agreements stating they were 'experienced' investors and accepting they had been warned of the 'unlimited risks associated with foreign exchange margin trading, including trading on accumulator products'.
At that time, Mr Widjaja had 'at least three years' experience in foreign exchange margin and derivatives trading, including foreign exchange accumulator products, and was familiar with the terminology and products used by investment banks', UBS said.
On the margin calls, UBS said the client adviser assigned to the Widjajas, Ms Patricia Quek, called Mr Widjaja twice on Aug 16 last year.
One call was to say that additional collateral was needed for the account as the Japanese yen had suddenly spiked.
The second call was to inform Mr Widjaja that UBS would close out the positions as the collateral was still not enough.
Ms Quek is understood to speak Bahasa Indonesia, as well as English and Mandarin.
UBS also pointed out that some of the trades were made by Mr Gunawan Widjaja, understood to be Mr Widjaja's elder brother.
UBS said Mr Gunawan has similar investment experience and knowledge as his brother and was authorised to make trades and pay for them.
The Widjajas denied that Mr Gunawan was authorised to give instructions to UBS, and said he was not an account holder or a signatory to the account.
Both sides also clash on the purpose of the account. The Widjajas claim it was meant for succession planning and wealth management - implying they had a lower appetite for risk. UBS claims it was meant for investments.
The couple, represented by Manjit Govind & Partners, applied for a summary judgment against UBS last month.
While the court did not grant this, assistant registrar Yeong Zee Kin gave UBS a 'conditional leave to defend'.
This requires the bank to put up US$8.75 million - the sum claimed by the couple, including costs - in order to mount its defence.
UBS, which is being represented by a Drew & Napier team led by Senior Counsel Cavinder Bull, is appealing against the court's decision to impose conditions on its right to defend.
Accumulator products have made headlines recently, with some companies losing big on accumulator trades.
Hong Kong-listed Citic Pacific stands to lose US$2 billion on unauthorised investments in a currency accumulator linked to the Australian dollar, which has plunged against the United States dollar in recent weeks. [email protected]
</TR><!-- headline one : end --><TR>Indonesians claim they lost $12.7m on trades in currency derivatives </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
PHOTO: AGENCE FRANCE-PRESSE
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->AN INDONESIAN couple are suing UBS Singapore for US$8.6 million (S$12.7 million), which they say was lost because of an 'unsuitable' foreign exchange product offered to them by the bank.
Mr Turniady Widjaja and his wife Rosemary, who have been private banking clients of UBS since 2005, lost the money last year on trades in currency derivatives known as accumulators.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>CONFLICTING CLAIMS
Couple say:
</TD></TR></TBODY></TABLE>According to court documents obtained by The Straits Times, they claimed they were told that trading in accumulators was 'simple and flexible' and that 'there would be guaranteed profits', but the product turned out to be 'sophisticated'.
The Widjajas also said they did not receive margin calls from UBS asking them to top up their collateral.
This resulted in the bank 'closing out' their loss-making positions in August last year, a move that wiped out most of the assets in their roughly US$10 million account.
Mr Widjaja is a managing director of an Indonesian firm that deals in textiles and construction, among other things.
He said that he left school in his first year of secondary education and has only a limited grasp of spoken and written English.
In its statement of defence, UBS said that all transactions in connection with the couple's accounts were made by them or their authorised representatives, with the Widjajas' knowledge and consent.
It said the Widjajas signed agreements stating they were 'experienced' investors and accepting they had been warned of the 'unlimited risks associated with foreign exchange margin trading, including trading on accumulator products'.
At that time, Mr Widjaja had 'at least three years' experience in foreign exchange margin and derivatives trading, including foreign exchange accumulator products, and was familiar with the terminology and products used by investment banks', UBS said.
On the margin calls, UBS said the client adviser assigned to the Widjajas, Ms Patricia Quek, called Mr Widjaja twice on Aug 16 last year.
One call was to say that additional collateral was needed for the account as the Japanese yen had suddenly spiked.
The second call was to inform Mr Widjaja that UBS would close out the positions as the collateral was still not enough.
Ms Quek is understood to speak Bahasa Indonesia, as well as English and Mandarin.
UBS also pointed out that some of the trades were made by Mr Gunawan Widjaja, understood to be Mr Widjaja's elder brother.
UBS said Mr Gunawan has similar investment experience and knowledge as his brother and was authorised to make trades and pay for them.
The Widjajas denied that Mr Gunawan was authorised to give instructions to UBS, and said he was not an account holder or a signatory to the account.
Both sides also clash on the purpose of the account. The Widjajas claim it was meant for succession planning and wealth management - implying they had a lower appetite for risk. UBS claims it was meant for investments.
The couple, represented by Manjit Govind & Partners, applied for a summary judgment against UBS last month.
While the court did not grant this, assistant registrar Yeong Zee Kin gave UBS a 'conditional leave to defend'.
This requires the bank to put up US$8.75 million - the sum claimed by the couple, including costs - in order to mount its defence.
UBS, which is being represented by a Drew & Napier team led by Senior Counsel Cavinder Bull, is appealing against the court's decision to impose conditions on its right to defend.
Accumulator products have made headlines recently, with some companies losing big on accumulator trades.
Hong Kong-listed Citic Pacific stands to lose US$2 billion on unauthorised investments in a currency accumulator linked to the Australian dollar, which has plunged against the United States dollar in recent weeks. [email protected]
