Jan. 23 (Bloomberg) -- Credit Suisse Group AG was sued by Li Tao, chairman of New York-listed China Green Agriculture Inc., who claims the bank was negligent and made unauthorized trades on his behalf.
The bank misled Li on the status of his account, failed to explain risks on some trades and didn’t inform him within a reasonable time of any shortfall, according to a lawsuit filed in Singapore High Court. The bank denied any wrongdoing.
Credit Suisse traded accumulators tied to a Hong Kong-listed company without his permission, Li claimed. When his account balance fell into the negative, the bank used HK$60 million ($7.7 million) he had on deposit to cover the shortfall without his permission, Li said. He had intended to use the money for his immigration to New Zealand, the Chinese citizen said in court papers.
Credit Suisse had explained the risks to Li, without having any legal obligation to do so, the Zurich-based bank said in its defense papers filed this month. Li, who had substantial investment experience and a high-risk attitude, made trading decisions independently, the bank said.
Accumulators commit investors to buy securities at preset prices for a specified time.
Li orally approved the trades he claims were unauthorized and failed to dispute them until more than a year later, according to papers filed by Credit Suisse.
Credit Suisse doesn’t comment on ongoing litigation, Edna Lam, a spokeswoman for the bank, said in an e-mail. Li didn’t immediately respond to an e-mailed request for comment.
China Green, based in Xi’An, China, was the target of an analyst research report in 2011 alleging the company inflated its revenue and had improbable sales. Li wrote to shareholders and said the report had “countless errors” and was “untrue.”
The fertilizer maker had four shareholder lawsuits in the U.S. against its directors and auditor dismissed in 2012.
The case is Li Tao v Credit Suisse AG. S832/2013. Singapore High Court.
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