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Germany’s largest bank in billion-dollar lawsuit with investment fund

Unpaid margin calls and foreign-exchange losses in dispute

Germany’s largest bank, Deutsche Bank AG, is now facing billions of dollars’ worth of charges from investment fund Sebastian Holdings Inc., which claims the bank allowed one of Sebastian’s traders to breach currency-trading limits.

Klaus Said was working on behalf of Sebastian, as authorized by the fund’s owner Alexander Vik, when he carried out the unauthorized trades. Said was only permitted to deal in $35 million worth of “plain vanilla” currency, a limit which Sebastian claims Deutsche Bank was aware of when it allowed him to trade in derivatives.

Deutsche Bank is already pursuing a lawsuit against Sebastian in U.K. courts, for $245 million worth of unpaid margin calls, Bloomberg reports. Sebastian filed their counterclaim in London in March, saying it lost profits worth $2.5 billion because of the dispute. The fund is also suing the bank for $750 million in New York due to alleged breach of fiduciary duty, unjust enrichment and negligent misrepresentation.

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