Swatch Loses $24.3 Million Fight With UBS on Credit-Crunch Loss
(Bloomberg) — Swatch Group AG, Switzerland’s biggest watchmaker, lost its court bid to recoup 24.8 million Swiss francs ($24.3 million) of losses from investments with UBS Group AG that turned sour.
The Swiss lender wasn’t liable for the watchmaker’s losses on 46.9 million francs of “absolute-return” investments made in 2007 in the run-up to the global financial crisis, the country’s federal court said in a Dec. 18 ruling published today.
The tribunal backed a decision by the Zurich commercial court, which said Swatch was responsible for its choice of investment. The bank is only liable for a recommendation, if it is “obviously unreasonable at the time of issuance,” the federal court said.
A verdict in favor of Biel-based Swatch could have encouraged other investors to seek damages for losses amid the market crash that followed the demise of Lehman Brothers Holdings Inc. in 2008.
“It’s a pity,” Swatch said in an e-mailed statement on the ruling. “A pity most of all for all the small private investors. And unfortunately gratifying for the investment bankers.”
UBS said in an e-mailed statement that it “has always indicated that it acted correctly, as now confirmed by this binding ruling.”
–With assistance from Jan Schwalbe in Zurich and Gaspard Sebag in Brussels.
To contact the reporter on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Peter Chapman
