Deutsche Bank Faces Claim That Margin Call Resulted In $2.5bn In Lost Profits

Deutsche Bank - External

Alexander Vik went to Deutsche Bank’s London office in October 2008 to meet account managers who congratulated the Norwegian entrepreneur on how well his Sebastian Holdings Inc. investment fund was doing.

Bloomberg reports that within a month, as global markets tumbled into crisis, the same bankers demanded about $530m against the fund’s currency bets and began to liquidate its positions.

Vik, 58, will argue at a 12-week trial starting in London Monday that Deutsche Bank’s actions resulted in losses and missed profits totaling about $2.5bn. A judge will have to decide whether Sebastian’s calculation of lost trading gains is accurate, said John Day, a lawyer at London-based litigation firm DaySparkes.

'Quite apart from the spectacular sums at stake, one of the key questions for the court will be whether the losses that Sebastian is claiming following the closing out of its positions were too speculative', said Day, who isn’t involved in the suit. 'This case could well have potentially far-reaching implications for the wider banking community'.

Hit the link below to access the complete Bloomberg article:

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