UBS Loses Bid to Dodge Chinese Billionaire’s $500 Million Suit
- Judge says London is the right place to rule on the case
- Businessman alleges negligence after investment was wiped out
UBS Group AG lost its bid to throw out a $500 million lawsuit brought by an exiled Chinese billionaire over a costly margin call in 2015.
A London judge ruled that the U.K. does have the right to hear the case brought by Guo Wengui, a wealthy businessman with close ties to former Donald Trump adviser Steve Bannon, meaning the suit can continue to trial. It’s a blow for UBS who had sought to get part of the case dismissed on jurisdiction grounds.
UBS and a lawyer for Guo didn’t immediately respond to requests for comment.
Guo alleges UBS gave negligent advice that led him to borrow money tied to the purchase of shares in Chinese brokerage Haitong Securities Co. He says that investment was almost completely lost when UBS forced the sale of the stock after the Hong Kong-traded shares plunged during a market rout.
A London judge Wednesday said she could oversee the case because London is where the “harmful event” occurred and UBS’s London unit “sufficiently and significantly participated in several elements” of the action forming the claims.
Author: Ellen Milligan, Bloomberg