Abhishek Sachdev, CEO of Vedanta Hedging speaks with Euromoney about the mis-selling of FX derivatives and discusses the reasons why such cases rarely make it to the courts.
Banks and brokers have improved some of their practices since the first mis-selling complaints came to light. However, customers are still being sold products that are more complex than they need and downside risk is not always explained correctly.
A related issue is how banks and brokers explain the potential negative credit implications of certain long-dated FX derivative structures; Abhishek discusses cases where some FX options result in a worsening of the customer’s creditworthiness even if the actual trade doesn’t go against them.
There have been at least a dozen cases over the last few years where we have helped the client reach some kind of restructuring or settlement with their bank or broker
Customers are still being sold products…and downside risk is not always explained correctly
Please see below for the full article.Euromoney Why FX derivative mis-selling disputes rarely go public (1)