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

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

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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