A Singapore businesswoman who sued DBS Bank for misrepresentation and negligence after losing US$6 million (S$8.1 million) in forex trades has lost her case in the High Court.
Ms Florence Suryawan alleged that the bank had misled her into buying barrier options that were meant to protect her margin level in the volatile forex markets.
She said that these options, which she understood to work like insurance, turned out to be "useless" in hedging her investments.
In September 2011, the falling Australian dollar caused Ms Suryawan, who was acquiring the currency through structured products known as accumulators, to suffer massive losses.
After DBS closed out her positions, the balance of her accounts with the bank fell from US$6.2 million to about US$410,000.
Her lawyer, Mr Nicholas Narayanan, argued that DBS was negligent in its advice about the options and made false representations about the protection offered.
DBS, represented by Senior Counsel Ang Cheng Hock, argued that she was a sophisticated investor with experience in trading complex derivative products.
The bank contended that she was fully aware that the options offered limited protection; in deciding to buy them, she had relied on her own judgment.
Yesterday, Justice Vinodh Coomaraswamy dismissed her claims.
Mr Narayanan told The Straits Times that his client will be studying the judgment carefully before deciding on her next course of action.
Ms Suryawan has diverse business experience, from manufacturing to digital media.
In 2010, she used her margin trading facility at DBS to invest in accumulators, "buying" the Australian dollar at regular intervals below the prevailing market price for a fixed period of time.
Between August and September 2011, she bought nine barrier options from DBS, which had lower premiums than conventional ones. Each option could be exercised only on specific dates and had knock-out features, meaning its value falls as the forex rate moves closer to a certain price.