Dec. 8 — UBS AG is off the hook in a $500 million fraud suit by a British Virgin Islands entity that borrowed money from the bank to invest in a Chinese company ( Ace Decade Holdings Ltd. v. UBS AG , N.Y. Sup. Ct., No. 653316/2015, 12/8/16 ).
Ace Decade Holdings Ltd. sued UBS after it purchased shares in a China-based financial services company with margin financing from the Swiss bank. When the Chinese stock market dislocated in 2015, UBS called the loan and sold Ace’s position when it didn’t pay on time. As a result, Ace claimed, it lost virtually its entire investment.
UBS moved to dismiss saying that the court lacked the authority to hear the claims and that New York was an inconvenient forum.
Granting the motion, Judge Eileen Bransten of the New York Supreme Court said the claims didn’t have a sufficient connection to New York because they involved a purchase by a British Virgin Islands company (Ace) through a Chinese investment fund, of shares regulated by Chinese law, denominated in Hong Kong dollars and listed on the Hong Kong Stock Exchange. Ace couldn’t manufacture jurisdiction over UBS by moving its operations to New York, the court said.
The court also ruled that even if it had personal jurisdiction, it would dismiss because another court is better suited to hear the case.
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