(Adds missing "S" in currency denomination in last paragraph
and adds U.S. dollar conversion)
By Laura Philomin and Saeed Azhar
SINGAPORE, Sept 26 Goldman Sachs has been
sued by a Singapore businessman for allegedly giving misleading
advice that cost him 3.18 billion yen ($32.22 million) in losses
on currency options, according to court documents seen by
Oei Hong Leong, ranked 32nd on Singapore's rich list by
Forbes with a net worth of $745 million, wants Goldman to
compensate him for the losses as well as pay him interest and
costs. Oei also wants the court to award him damages.
Goldman has rejected Oei's claim, with a spokeswoman in Hong
Kong saying, "We believe the lawsuit is without merit and we
intend to vigorously contest it."
Oei said in a statement of claim that he had on May 15 made
two bets that the Brazilian currency will appreciate against the
yen on the advice of a Hong Kong-based Goldman banker.
Oei, who had been betting that the U.S. dollar will rise
against the Japanese currency, claimed that the Goldman banker,
Mats Dewitte, had told him the real was anchored to the dollar
and that by switching from the greenback, he would also benefit
from higher interest rates earned on the Brazilian unit.
"Many clients are turning to EMFX/Yen plays instead of
USDJPY to earn greater carry/yield ... BRL vs USD volatility is
low because the central bank is anchoring BRL to USD," Oei
quoted Dewitte as saying in an email that the businessman
reproduced in a claim dated Sept. 20.
EMFX refers to emerging markets foreign exchange, while BRL
and USD are the codes for the Brazilian and U.S. currencies.
But since Federal Reserve Chairman Ben Bernanke raised the
prospect of ratcheting down the Fed's economic stimulus in late
May, the Brazilian real has been one of the biggest losers among
emerging market currencies.
Dewitte and the law firm representing Oei declined to
Oei had in 2009 sued Citigroup's private banking arm for
alleged negligence and misrepresentation after he made an
estimated loss of S$1 billion ($798 million) on foreign exchange
and U.S. Treasury bond transactions in 2008. That case was
subsequently settled out of court.
($1 = 98.6900 Japanese yen)
($1 = 1.2540 Singapore dollars)
(Writing by Kevin Lim; Editing by Ryan Woo)