UBS loses bid to dodge Chinese billionaire's $671 million lawsuit

Chinese billionaire Guo Wengui alleges UBS gave negligent advice that led him to borrow money tied to the purchase of shares in a Chinese brokerage. PHOTO: REUTERS

LONDON (BLOOMBERG) - UBS Group has lost its bid to throw out a US$500 million (S$671 million) lawsuit brought by an exiled Chinese billionaire over a costly margin call in 2015.

A London judge ruled that Britain does have the right to hear the case brought by Mr Guo Wengui, a wealthy businessman with close ties to former Donald Trump adviser Steve Bannon, meaning the suit can continue to trial.

It is a blow for UBS, which had sought to get part of the case dismissed on jurisdiction grounds.

UBS and a lawyer for Mr Guo did not immediately respond to requests for comment.

Mr Guo alleges that the bank gave negligent advice that led him to borrow money tied to the purchase of shares in Chinese brokerage Haitong Securities. He says that investment was almost completely lost when UBS forced the sale of the stock after the Hong Kong-traded shares plunged during a market rout.

The London judge on Wednesday (Feb 9) said that she could oversee the case because London is where the "harmful event" occurred and UBS' London unit "sufficiently and significantly participated in several elements" of the action forming the claims.

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