The second-ever class-action lawsuit in Danish history has been filed against the country's Jyske Bank over a hedge fund it marketed.
At issue is the Jyske Invest Hedge Markedneutral-Obligationer levered bond fund, which lost 84% in 2008. The fund has already caused as series of headaches for the bank: It has been sued by investors 43 times, losing 25 of those cases, and last year was reprimanded by the Danish Financial Supervisory Authority for providing an "insufficient description" of the fund to clients.
In June, Jyske admitted that its advice was less than adequate to five customers. But the bank told Dow Jones Newswires that it would fight the class action, which includes an unspecified, and likely growing, number of plaintiffs.
"The financial crisis was a nightmare for everybody and lots of funds got in trouble and lost a significant part of their value," Peter Stig Hansen, head of Jyske's legal department, said. "Nobody could have anticipated the way things turned out and therefore the bank cannot be held legally responsible."
The class-action is seeking recovery of losses suffered by investors. The hedge fund has done its part to do that over the past two years, bouncing back with a 40% return last year and rising 18% this year.