In London’s hipster Cereal Killer Cafe, a bowl of mini Weetabix costs more than $5.30. But in a courthouse across town, the breakfast cereal could end up costing Deutsche Bank a lot more: $118 million.
Bloomberg News reports that Bright Food Hong Kong Ltd. sued the lender in Shanghai, accusing Deutsche Bank of misleading it into buying British pound-to-U.S. dollar currency swaps linked to a stake in Weetabix Ltd. The bank filed in May in London to switch the case to British courts.
Companies are increasingly filing lawsuits over the derivatives since last year’s Brexit vote cut the value of the pound, saying they were sold products they didn’t understand and whose risks they couldn’t measure. Bright Food is accusing Deutsche Bank of “misrepresentations” to convince it to take up the swaps, according to a claim form filed in London.
The bank says the company “fully understood the terms and associated risks of the transactions” and “was capable of assuming, and assumed, the risks” involved.
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