Goldman Sachs Sued by Singapore Client Oei Over $34.3 Million Loss on Brazilian real-yen options trades

December 6, 2013 Leave a comment

Goldman Sachs Sued by Singapore Client Oei Over Loss

Goldman Sachs Group Inc. (GS) was sued by Singaporean wealth-management client Oei Hong Leong over a $34.3 million loss on Brazilian real-yen options trades he said it 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 today 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.

Michael DuVally, a spokesman for Goldman Sachs in New York, didn’t immediately respond to an e-mail seeking comment on the lawsuit filed today.

Oei, 65, 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.

Currency Bet

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 Brazilian currency fell 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 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 atan17@bloomberg.net; Chris Dolmetsch in New York State Supreme Court in Manhattan at cdolmetsch@bloomberg.net

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