{"id":6987,"date":"2012-01-12T20:36:56","date_gmt":"2012-01-12T18:36:56","guid":{"rendered":"http:\/\/www.myza.co.za\/01\/absa-sues-nedbank-for-95-mln-over-pinnacle-trading\/"},"modified":"2012-01-12T20:36:56","modified_gmt":"2012-01-12T18:36:56","slug":"absa-sues-nedbank-for-95-mln-over-pinnacle-trading","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/absa-sues-nedbank-for-95-mln-over-pinnacle-trading\/","title":{"rendered":"Absa sues Nedbank for $95 mln over Pinnacle trading"},"content":{"rendered":"<p>\t\t<span><\/span><\/p>\n<p>* Absa says Nedbank engaged in &#8220;reckless lending&#8221;<span><\/span><\/p>\n<p><span><\/span><\/p>\n<p>* Nedbank says will defend legal action<\/p>\n<p><span><\/span><\/p>\n<p><span class=\"articleLocation\">JOHANNESBURG<\/span> Jan 12 (Reuters) &#8211; South African bank<br \/>\nAbsa is suing domestic rival Nedbank for $95 million to recoup<br \/>\nlosses relating to the trading of single stock futures (SSFs) in<br \/>\nproperty firm Pinnacle Point, court papers showed on Wednesday.<\/p>\n<p><span><\/span><\/p>\n<p>Absa, majority owned by Barclays, was<br \/>\nforced in 2009 to buy stakes in four Johannesburg-listed firms<br \/>\n&#8212; including Pinnacle &#8212; for 1.4 billion rand ($172 million)<br \/>\nafter clients defaulted on payments related to SSF contracts.<\/p>\n<p><span><\/span><\/p>\n<p>An SSF is a leveraged contract to buy shares in a company at<br \/>\na set price in future. When stock prices fall, investors may<br \/>\nstruggle to meet widening margin payments.<\/p>\n<p><span><\/span><\/p>\n<p>Nedbank bought shares in Pinnacle (then called<br \/>\nAcc-Ross Holdings) and sold futures contracts based on these to<br \/>\nCortex Derivative Brokers, which had named Absa as underwriter.<\/p>\n<p><span><\/span><\/p>\n<p>Absa said in court papers Nedbank must have known Cortex<br \/>\nwould default on margin payments related to the SSFs but chose<br \/>\nto overlook its creditworthiness.<\/p>\n<p><span><\/span><\/p>\n<p>&#8220;We cannot be held responsible for other parties&#8217; losses<br \/>\nsuffered as a result of a decline in the share price of Pinnacle<br \/>\nPoint. We will defend ourselves,&#8221; said Brian Kennedy, managing<br \/>\ndirector of Nedbank Capital.<\/p>\n<p><span><\/span><\/p>\n<p>The Johannesburg Stock Exchange is the biggest SSF market in<br \/>\nthe world by volume, although in value terms it is much smaller<br \/>\nthan several others including India&#8217;s national stock exchange<br \/>\nand the Eurex derivatives exchange.<\/p>\n<p><span><\/span><\/p>\n<p><span><\/span><\/p>\n<p class=\"copyright\">\n<p>         \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":"<p>* Absa says Nedbank engaged in &#8220;reckless lending&#8221; * Nedbank says will defend legal action JOHANNESBURG Jan 12 (Reuters) &#8211; South African bank Absa is suing domestic rival Nedbank for $95 million to recoup losses relating to the trading of single stock futures (SSFs) in property firm Pinnacle Point, court papers showed on Wednesday. Absa, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-6987","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/6987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=6987"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/6987\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=6987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=6987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=6987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}