BNP Paribas must pay a client $16.6m over a dispute related to one of the bank’s hedge-fund products.
Bloomberg News reports that the firm’s securities unit is required to give Ontonimo $16.1m in compensatory damages and $500,000 in legal fees, according to a June 26 arbitration decision on the Financial Industry Regulatory Authority’s website Tuesday.
Ontonimo was incorporated to invest the personal assets of BNP Paribas retail clients Margaret and James Eringer, who live in London, said their attorney, Barry R. Lax.
BNP Paribas recommended and sold the Eringers a speculative and highly leveraged derivative product and required James Eringer to serve as an investment adviser of Ontonimo even though he had no professional experience managing money, Lax said in a phone interview. Ontonimo was created because the Paris-based bank wasn’t permitted to sell the derivative product directly to retail clients, he said.
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