"I Kill You Later" – Bank's Risk Disclosure Statement effective in Accumulator case

The High Court has found in favour of a bank in its first decision on a mis-selling case in relation to structured products, allowing the bank to rely upon the express contractual terms in the account opening forms, in particular, to negate any assumption of the duties not otherwise contained in the contract between the bank and its customers.

In the recent case of Kwok Wai Hing Selina v HSBC Private Bank (Suisse) SA (the "Client" and the "Bank"), the Client incurred huge financial losses relating to her investments in structured products following a crash in the financial markets in late 2007. She alleged that various breaches of duty by the Bank caused her to suffer financial losses of around HK$80 million. However, the Court found that the Bank did not owe any enhanced duties to advise or manage the Client's account, as claimed by the Client, and dismissed her claims of unsophistication and lack of understanding in relation to structured products that she purchased. A Risk Disclosure Statement (the "Statement") was found to have clearly placed the burden on the Client to manage her own financial position – despite recommendations provided by a bank from time to time, it is "ultimately … for a client to assess whether a particular transaction was suitable in light of that client's financial condition, risk tolerance and investment experience".

While the facts of each case, including in particular the individual circumstances of each investor, will be crucial in determining any mis-selling case, the Court's views in this case provide some guidance on the determination of the future cases, and certainly provide some important takeaway points.

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