Sunday, 29 May 2016
Last updated 1 day ago
Nov 19 2010 | 6:39am ET
A hedge fund has sued its bank for allegedly waiting too long to close out its options during the financial crisis, causing the fund to lose more than 97% of its value.
Euroption is seeking €200 million from Skandinaviska Enskilda Banken. The British Virgin Islands-based hedge fund said the Swedish bank delayed its exit from its option positions after it took the fund’s portfolio in 2008. The value of Euroption’s portfolio fell from €74 million to less than €2 million in less than 10 days, it said.
“SEB confirms that a former SEB Futures customer has sued the bank and there is an ongoing legal process that will be heard in an English court in the summer of 2011,” SEB said. “SEB denies all claims.”
A spokesman for the bank, Olle Kallemur, told The Times of London, “We always act according to market practice and close positions when the customer doesn’t respond to repeated demands on margin securities.”