Mis-selling decision: swaps

[Vedanta Hedging]

Re: Mis-selling decision: swaps

Not at all. I am happy to answer questions people have. I was responding to an earlier post that was against firms hedging with their Banks.

My aim is to spread awareness that there is independent advice and pricing out there for hedging, and that clients shouldn't trust their Bank implicitly to always provide them the best advice / pricing

[Bill-K]

Re: Mis-selling decision: swaps

Just as I'd not buy a mortgage from a garden centre, I'd not buy hedging from a bank.

OMG - I WAS gonna suggest that I sober up before replying (for those who choose not to associate with me, I work nights...taking respectable citizens home in a friggin' taxi.)

Alas - I'm gonna havta get me another stiff one.

....and I mean that most sincerely, folks !!!

'Tis vegetative madness, indeed, CC !!!

....But our lovely garden centres DO do a nice line in Christmas Trees, this time of year, don't they ?

"Oi, you....cute little Fairy.

...Spread your wings and swivel on this !!!"

:christmascandle: :santa_cheesy:

[SpringerSpaniel]

Re: Mis-selling decision: swaps

The issue is not that hedging is always wrong or should never be permitted, but that the law as it currently stands does not permit a public body such as a local authority to use such financial instruments.

This was not initially known and a number of authorities did so, which was subsequently found to be ultra vires. This has given rise to a series of interesting caselaw about the recoverability of money paid under a mistake of law, which sets legal principle relevant to other types of claims involving a changed understanding of the law between the formation of a contraact and the date of the claim arising from it.

[Vedanta Hedging]

Re: Mis-selling decision: swaps

this is very interesting indeed. I am surprised that Banks did so many large (and long dated) interest rate and inflation linked swaps for local authorities if they were not permitted to do so.

In fact, Banks had whole teams just working on Public authorities.

Could it be that although technically defined as financial instruments, since these products were used to hedge an underlying commercial exposure, that they were permitted?

[SpringerSpaniel]

Re: Mis-selling decision: swaps

Neither the banks nor the authorities realised for a long time that the use of hedging was not permitted for the authorities.

It came to light under the work of a particular auditor.

[SpringerSpaniel]

Re: Mis-selling decision: swaps

The judgement in Kleinwort Benson v City of Leicester discusses this at (very considerable) length, nd refers to other relevant cases.

[Vedanta Hedging]

Re: Mis-selling decision: swaps

BBC have taken an interest (no pun intended) and written an article on the Business section of their website about swap mis-selling

[Curlyben]

Re: Mis-selling decision: swaps

BBC News - Do UK banks face another mis-selling scandal?
Interesting piece as well.
Good to put a real name and face to a forum member..

[Celestine]

Re: Mis-selling decision: swaps

Excellent piece. Nice to see a face too!

Now....your turn Curly

[Bill-K]

Re: Mis-selling decision: swaps

To Vedanta Hedging:

We forum critters can be a bit suspicious of new contributors who appear to be working for the 'opposition.' Recently, contributions from CMC employees have been subjected to a somewhat primal 'baptism of fire.' It's a 'knee-jerk' protective reflex, and I am guilty of this hostility in my earlier post #17. I apologise for my ignorance - and resultant rudeness, as I can now see that those who are more informed than myself are affording you respect, sir.

I would like to also confirm that I have NOT been asked by Admin or Team to make this apology. I come and go as I choose, as I think Celestine and CurlyBen will attest. The apology is mine alone, and is truly offered voluntarily - person to person. May I now offer you a belated welcome to Legal Beagles.

To SpringerSpaniel:

My apologies to you also, SS, as I have not made a useful contribution to this thread.

To Cel, Ben, et al:

For future clarity, by all means delete my stuff in this thread, when there's been time for VH & SS to read it.

[...grovels off along the forest floor, with imaginary tail 'twixt legs...]

[Vedanta Hedging]

Re: Mis-selling decision: swaps

No worries at all.

[Bill-K]

Re: Mis-selling decision: swaps

No worries at all.

Most appreciated, VH.

I usually put my efforts into the maths side of things, and am currently working with PPI claims. I think I might do well to 'shut up and listen' here for a while, as this interest hedging might be a source of 'raison d'étre for me' in the near future !!!

If there is a source of info regarding the sheer 'mathematical mechanics' of this manouevre, I would appreciate a link to it. Sure - there doesn't seem to be a cold, hard "Right or Wrong" aspect established as yet - but it looks like that will surface eventually... and perhaps be dragged before the Courts or the FOS.

I guess that guys like yourself will assist with that.

Like Sting said..."Every step you take...I'll be watching you."

And learning...

Cheers guys. :billk:

[Vedanta Hedging]

Re: Mis-selling decision: swaps

no problem, no offence taken

[Vedanta Hedging]

Re: Mis-selling decision: swaps

A Trial that has just ended against HSBC (re: Interest Rate swap mis-selling), is likely to receive the Judgement in Open Court in January

[Bill-K]

Re: Mis-selling decision: swaps

Is that likely to go to Appeal, and perhaps set a precedent ?

LOL - I need to know so that Turbo and I can start putting a spreadsheet on the slow cooker !!!