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(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 firstname.lastname@example.org To contact the editors responsible for this story: Elisa Martinuzzi at email@example.com Peter Chapman