Credit Suisse loses lawsuit filed by wealthy Kuwaiti investors

(Bloomberg) A Kuwaiti family worth at least half a billion dollars won a London lawsuit against Credit Suisse Group AG after losing $29 million (€24m)while investing with the bank during the 2008 financial crisis.

Mahmoud Haji Haider Abdullah and his sons, Maytham, Mahdi, and Mansour, had lost $29 million at the end of October 2008, Judge Andrew Baker said Monday, without detailing the possible damages in the case.

He said the bank was responsible for "actionable breaches of duty" over the family’s purchase of a $20 million three-year note in May 2008. In October 2008, Maytham and Mahdi chose not to meet a margin call issued by Credit Suisse, which meant they suffered "a total loss of their net investment" in a series of notes and were left overdrawn at Credit Suisse by $336,275.60.

The bank had argued that the family’s refusal to meet the margin call "was so unreasonable as to amount to a failure to mitigate loss," and that the losses "resulted from the extreme nature and severity of the 2008 crash," the judgment says. But the judge said "it was not unreasonable to prefer to exit their investments and stop their losses as they did."

A spokesman for the bank declined to comment, and lawyers for the family didn’t want to immediately comment.

Baker didn’t say how much the bank should pay the family. He said one method would put the figure at $17.9 million, and he wanted further calculations to be done before determining the final amount.

He said the Kuwaiti family, who were clients of Credit Suisse’s London-based private banking business, had a net worth in the order of "at least" $500 million between 2004 and 2008 when they were investing through Credit Suisse.

Mahmoud Haji Haider Abdullah made his "business fortune" through a retail jewelery business in the 1970s and later expanding into real estate, media, telecoms, financial services, energy, oil and gas, among other things, the judgment says.