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Saturday, 13 September 2008
Investor sues Goldman over HK$60m loss
The owner of one of Hong Kong’s leading beauty parlour chains claims that she is HK$60 million out of pocket after one customer got more than facial treatments out of their relationship More in comments...
The owner of one of Hong Kong’s leading beauty parlour chains claims that she is HK$60 million out of pocket after one customer got more than facial treatments out of their relationship.
Modern Beauty Salon Holdings chairman Joyce Tsang Yue is taking legal action against Goldman Sachs, alleging a former salesman at the company who visited her chain for beauty treatments traded risky derivatives without her permission through her accounts, leading to HK$60 million in losses.
Ms Tsang alleges that Ronnie Wong Wang, who received facial treatments at Modern Beauty and worked at the wealth management department of Goldman, traded a number of different products, including highly leveraged “accumulators”, from October last year to February this year.
A Goldman spokesman yesterday said the bank was “confident that the legal process under way will show the claims are without merit”.
A bank spokesman said Ms Wong had left the company earlier this year but declined to give a reason for her departure. Ms Wong could not be contacted for comment yesterday.
Ms Tsang filed a writ to the High Court against Goldman in May but only gave full details of the trading records at a press conference yesterday. A court hearing is scheduled for November.
Ms Tsang said she had known Ms Wong for eight years and opened two trading accounts at Goldman in 2005 when Ms Wong joined the company.
In January this year, Ms Tsang said she found her accounts had problematic trades which she alleged had been conducted by Ms Wong without her consent. The problematic trades included eight accumulator contracts.
Accumulator contracts have come under fire after wealthy investors suffered huge losses.
The investors complained that bankers promoted the high-risk products without explaining the risks in a falling market. Accumulators work like a put option in that investors can make big gains in a rising market but suffer huge losses in a falling market.
“I signed the account opening document which clearly indicated that all trades must be done only after my authorisation,” Ms Tsang said yesterday. “I did not intend to open discretionary accounts. But now, someone may have breached the rule.”
Yesterday she played what she alleged was an audio recording of Ms Wong stating she would sell her property to repay HK$18 million to Ms Tsang.
Although Ms Wong had promised to make repayments, Ms Tsang said she had not received any monetary compensation.
“Why doesn’t Goldman promise to compensate for my losses? I have complained to Goldman and have reported the case to the police and the Securities and Futures Commission but I have not yet received a satisfactory response,” she said.
A spokesman at the SFC said it could not comment on individual cases due to privacy provisions.
1 comment:
Investor sues Goldman over HK$60m loss
Enoch Yiu
12 September 2008
The owner of one of Hong Kong’s leading beauty parlour chains claims that she is HK$60 million out of pocket after one customer got more than facial treatments out of their relationship.
Modern Beauty Salon Holdings chairman Joyce Tsang Yue is taking legal action against Goldman Sachs, alleging a former salesman at the company who visited her chain for beauty treatments traded risky derivatives without her permission through her accounts, leading to HK$60 million in losses.
Ms Tsang alleges that Ronnie Wong Wang, who received facial treatments at Modern Beauty and worked at the wealth management department of Goldman, traded a number of different products, including highly leveraged “accumulators”, from October last year to February this year.
A Goldman spokesman yesterday said the bank was “confident that the legal process under way will show the claims are without merit”.
A bank spokesman said Ms Wong had left the company earlier this year but declined to give a reason for her departure. Ms Wong could not be contacted for comment yesterday.
Ms Tsang filed a writ to the High Court against Goldman in May but only gave full details of the trading records at a press conference yesterday. A court hearing is scheduled for November.
Ms Tsang said she had known Ms Wong for eight years and opened two trading accounts at Goldman in 2005 when Ms Wong joined the company.
In January this year, Ms Tsang said she found her accounts had problematic trades which she alleged had been conducted by Ms Wong without her consent. The problematic trades included eight accumulator contracts.
Accumulator contracts have come under fire after wealthy investors suffered huge losses.
The investors complained that bankers promoted the high-risk products without explaining the risks in a falling market. Accumulators work like a put option in that investors can make big gains in a rising market but suffer huge losses in a falling market.
“I signed the account opening document which clearly indicated that all trades must be done only after my authorisation,” Ms Tsang said yesterday. “I did not intend to open discretionary accounts. But now, someone may have breached the rule.”
Yesterday she played what she alleged was an audio recording of Ms Wong stating she would sell her property to repay HK$18 million to Ms Tsang.
Although Ms Wong had promised to make repayments, Ms Tsang said she had not received any monetary compensation.
“Why doesn’t Goldman promise to compensate for my losses? I have complained to Goldman and have reported the case to the police and the Securities and Futures Commission but I have not yet received a satisfactory response,” she said.
A spokesman at the SFC said it could not comment on individual cases due to privacy provisions.
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