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Richard Desmond sues GLG over ‘incomprehensible’ investment

by Robert St George on Jan 07, 2014 at 07:48

Richard Desmond sues GLG over ‘incomprehensible’ investment

Daily Express owner and Channel 5 boss Richard Desmond is taking legal action against GLG following an investment in which he lost almost £20 million, according to reports.

The case relates to a capital-protected swap linked to the performance of GLG’s funds, which Desmond (pictured) entered with Credit Suisse as a counterparty.

Desmond has already filed a suit against the Swiss bank, and he has now set his sights on GLG, which is owned by Man Group, too.

According to defence papers filed by GLG, seen by Bloomberg, Desmond’s lawyers have claimed the investment was ‘incomprehensible except to an expert’. They alleged that GLG failed to warn Desmond that there could be ‘unpredicted, unpredictable or unmanageable losses’.

GLG went on to describe Desmond as a ‘sophisticated investor with significant prior experience of investing in hedge funds and structured products’.

GLG further argued it had not advised Desmond on the investment. ‘Instead, in full knowledge of the risks associated with investing in hedge funds, Mr Desmond independently decided to enter into the transaction, having had the benefit of specialist advice and input from a team of skilled and experienced advisers,’ the hedge fund firm is reported to have said.

Man Group declined to comment.

4 comments so far. Why not have your say?

Max Thowless-Reeves

Jan 07, 2014 at 09:46

From the Credit Suisse website: "Our brand positioning comprises our vision and values and shapes how we think, how we behave and how we serve our clients. At Credit Suisse, this means listening attentively to the wishes of our clients and offering them superior solutions and the bank’s combined expertise and resources; in this way, empowering them to make the best decisions to achieve their financial goals."

How they must have laughed when they sold him that "capital-protected" product.

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Whatever the weather

Jan 07, 2014 at 13:28

Why did Desmond put so much money into "an incomprehensible" investment that he was able to lose £20m on it?

Isn't rule number one of investment that you shouldn't buy something you can't understand?

I'm finding it hard to feel sorry for him if he ignored this rule and blasted £20m into this product with his eyes firmly shut. Alternatively, if he took professional advice then the claim is surely against whoever provided that advice.

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Jan 07, 2014 at 14:23

Whatever the Weather - As I am sure you agree, he put enough to be able to lose £20M simply because he thought he would make a profit..When he didn't, he sued. That's the way of the world.

I certainly hope he is on "no win, no fee" with his solicitor, because based on the previous UHNW cases on sophisticated investors the bare facts tend to suggest he's not got a cat in hells chance.

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Neil Shillito

Jan 07, 2014 at 16:34

Another prat. What was the name of the 'Nectar' guy who invested £65m in an AIG Bond through Coutts?

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