An Investor who lost US$49 million (S$59.3 million) in buying 34 derivatives products through a bank which managed his wealth will get all monies back after the Singapore High Court held the bank had breached its duty of care in advising him.
Justice Philip Pillai, in judgment grounds released yesterday, found the Deutsche Bank had not drawn the investor's attention to the rapidly escalating risks linked to the products, nor did it provide him with risk management advice.
The losses were incurred from the products bought over three months from November 2007.
The case is believed to be the first in recent times where a private banking customer won a judgment against a bank for losses from derivatives products and obtained such a substantial sum in damages.
The investor, Dr Chang Tse Wen, 62, a well-known Taiwanese scientist, argued he was new to investing and had no experience in dealing with the products and relied instead on the advice given by the bank before the contract was signed.
He claimed Mr Johnny Wan, the bank's relationship manager, had repeatedly recommended the discounted share purchase programme, or accumulator, to him.
This product lets investors buy shares at a market discount.
If the price rises by more than a set percentage, the contract ends and the investor takes a profit.
The judge observed that Mr Wan had noted Dr Chang's financial inexperience and had persuaded Dr Chang to retain him and the bank to manage his wealth in March 2007.
Five months later, Dr Chang opened an account with Deutsche Bank in Singapore.