www.business.dk/investor/saxo-bank-vil-anke-landsretsdom?referrer=RSSSaxo Bank will appeal to the supreme court
Saxo Bank is ready to go to the Supreme Court after two weeks ago suffered a surprising defeat relate to the inflamed statement about the bank's action during the violent turmoil with the Swiss franc rate in January 2015. Meanwhile, more investors punch on the other side to appeal lost cases.
BM-mlau Michael Alsen Lauridsen
FOLLOW
The investment bank Saxo Bank has chosen to appeal a spectacular judgment , the Østre Landsret issued on 30 May.
Here, Saxo Bank suffered defeat in a case of the bank's act during the violent turmoil with the Swiss franc (CHF) in mid-January 2015 when an investor was given the court's words that the bank was not allowed to change trading prices backwards for a number of transactions in currency crossings between euro and CHF.
Formally, Saxo Bank will now apply to the Procedural Appeals Board for the possibility of appeal to the Supreme Court, which formalities offer.
"Østre Landsret's decision contradicts decisions from, for example, the West Court and contradicts ordinary banking practice, which has consequences not only for Saxo Bank but for the entire Danish financial sector," writes Steen Blaafalk, CFO at Saxo Bank, in a written comment.
Østre Landsret's ruling was surprising all the while that the Maritime and Commercial Court had initially given Saxo Bank support in a number of cases where frustrated customers had complained about the bank's act.
This caused the problems
At 10.30 pm Thursday, 15 January 2015, the Swiss National Bank (SNB) surprisingly decided to drop its fixed-exchange-rate policy against the euro by tapping the bond to the euro. The bond secured a minimum price of 1.20 Swiss franc (CHF) per. euro (EUR). The hijacking of the bond meant that the price fell to well below 1.20, and the value of the Swiss franc rose sharply. It caused major problems for those who had speculated that the tape would be maintained.
A number of customers in Saxo Bank believed they had secured a so-called stop loss, which is a function for conducting automatic trading at a given price. The purpose of a stop loss is to set a lower limit, thereby avoiding huge losses. For example, if a customer has a stop loss of 1.20 on EUR / CHF, it must be settled when the price passes 1.20.
It also happened in the first place, but about one and a half hours later, Saxo Bank informed an e-mail to customers that the settlement price could be changed. The reason was that the market was illiquid - that is, there were not enough buyers on the market - because of the shock of the Swiss National Bank. Therefore, you could not calculate the rates that were initially settled. A lot of settlement rates were later changed to 0.96 by Saxo Bank.
As a result, a number of customers feel cheated, but Saxo Bank points out that this is described in the terms that customers have accepted. Saxo Bank's customers have lost up to NOK 700 million due to the hijacking of the tape. Since customers can hardly pay the entire lost amount, Saxo Bank may be exposed to a large part of the loss.
Foreign investors are reviewing them
Henrik Gisløv, lawyer at Andersen Partners, has represented a large number of unsatisfied investors, of which several have lost cases at the Swedish Maritime and Commercial Court. He states that the District Court's judgment has spread "rapidly" among affected investors abroad.
'Østre Landsret takes a clear decision as to whether the condition in Saxo Bank's business conditions was met in relation to the financial contracts that Saxo Bank entered into with the customer. The judged court was not the case, which I agree with, "says Henrik Gisløv.
The whole discussion takes its starting point in fateful minutes on January 15, 2015, when the Swiss franc, CHF, ran off as a rocket when the Swiss central bank abandoned its currency at a fixed rate against the euro. At some point, the currency had risen by almost 39 per cent. against the euro before it stabilized at around 20 per cent. late afternoon. For the many investors in currency speculation, on Thursday one historic black was one of the kind: Several smaller trading companies had to turn the key over the day, while others slammed hundreds of millions.
At Saxo Bank, a large number of customers had currency positions tied up between the Swiss franc and the euro, and they felt closely at the nose when the investment bank subsequently announced that they had to adjust the prices of their transactions backwards.
"Due to today's exceptional market movements in Swiss francs, we have had to treat customers' orders in an extremely illiquid market. When we at some point are better able to get a true market liquidity, all orders will be revised and revised to more precise levels. This could result in a weaker price than the original trade, "was stated in a letter to the bank's customers, which Finans.dk has previously brought.
Wide different judgments
Since then, Saxo Bank and investors have been in lawsuits in both Denmark and abroad without the consensus as to whether the bank acted in violation of current legislation. In Denmark, FinansDanmark - former Bankers Council - has called the 'ordinary banking practice', while the Swedish Maritime and Commercial Court has in several cases also sentenced to Saxo Bank. Saxo Bank has also agreed with the National Board of Appeal. In foreign countries, the trade court in Zurich and the British financial ombudsman have in return sentenced to Saxo Bank in cases concerning the course of 15 January, and at the end of May, the Østre Landsret, which ruled in favor of one of the investors.
However, a large number of affected investors will not be able to bring an action against Saxo Bank now as the limitation period came into force in January earlier this year.
