Credit Suisse has lost a lawsuit filed by a Kuwaiti family who lost $29m investing with the bank during the 2008 financial crisis.
Mahmoud Haji Haider Abdullah and his sons, Maytham, Mahdi, and Mansour, had lost $29 million at the end of October 2008, Judge Andrew Baker reportedly said Monday, without ruling on how much money they can recover.
Judge Baker was reported as saying the bank was responsible for “actionable breaches of duty” over the family’s purchase of a $20 million three-year note in May 2008.
In October 2008, Maytham and Mahdi chose not to meet a margin call issued by Credit Suisse, which meant they suffered “a total loss of their net investment” in a series of notes and were left overdrawn at Credit Suisse by $336,275.60.
The bank had argued that the family’s refusal to meet the margin call “was so unreasonable as to amount to a failure to mitigate loss,” and that the losses “resulted from the extreme nature and severity of the 2008 crash,” the judgment says.
But the judge said “it was not unreasonable to prefer to exit their investments and stop their losses as they did.”
It is said the Kuwaiti family, who were clients of Credit Suisse’s London-based private banking business, had a net worth in the order of “at least” $500 million between 2004 and 2008 when they were investing through Credit Suisse.
Credit Suisse declined to comment on the matter when contacted by Private Banker International.