Indonesia Couple Sue Standard Chartered Over Forex Losses - Report

Tom Burroughes Group Editor 11 October 2013


An Indonesian couple who lost money from a failed foreign
exchange trade during the 2008 financial turmoil are suing UK-listed Standard
Standard Chartered Bank in Singapore and claiming it breached its duties, according to
the Straits Times (of Singapore).

Soesanto Prajogo and his wife Lioe Lip Joeng are demanding
damages of $2.441 million over one bank action and A$40,000 ($37,900) for
another alleged breach.

The couple opened accounts with American Express Bank in
2001 and held deposits in Singapore.
When StanChart bought American Express Bank in 2008, they became its private
banking clients in July of that year - and remain so today, the report said.

In the early morning of Oct7, 2008, StanChart closed out the
clients' New Zealand
dollar-US dollar positions without receiving instructions or authority from
them, according to the writ of summons filed in August in the High Court. The
couple claim they had more than enough collateral in the bank to avoid a margin
call, the report continued.

StanChart has "failed, refused or neglected" to
provide the couple with a reasonable or adequate explanation as to why the
position was closed unilaterally, stated the writ of summons, it said.

The couple are also unhappy with an incident in mid-2009,
when they say StanChart failed to execute a A$10 million forex option despite
an instruction from Mr Prajogo, it said. In both cases, StanChart acted
"wrongfully and in breach of its duties", they said.

StanChart has reportedly disputed the couple's version of
events in its defence filed on Wednesday this week.

The bank said the account had dropped into a margin
shortfall on the night of Oct 6, 2008, and early morning of 7 October. This
account had NZ dollar-US dollar and Aussie-US dollar positions open and the
greenback gained sharply against both.

StanChart reportedly said the night-desk trader during those
hours tried to call Mr Prajogo on his mobile and house phone numbers but could
not contact him. It then closed out the couple's NZ dollar-US dollar positions.

StanChart said it was entitled to do so at its discretion
and without notice to Mr Prajogo and Ms Lioe, in order to compensate for the
margin shortfall. StanChart also said it did not receive any instruction from
Mr Prajogo or Ms Lioe to execute the option on the Australia dollar-US dollar trade in
mid-2009 - the second issue raised by the couple, the reported added.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes