Dubai bank Mashreq is suing Dutch financial services giant ING over a $43m investment loss tied to derivative securities, according to a filing with a US federal court, Bloomberg reported.
In a complaint filed in Manhattan, the emirate’s second largest lender by market value, claimed that it had invested with ING in 2005, but in 2007 the company had wrongly revised these investments to include risky instruments such as centralised debt obligations.
In its claim Mashreq said these revisions were “nothing more than trickery” and ING had packed the Dubai bank’s account with “toxic, illiquid ‘structured securities’ based on pools of loans cast off by investment banks”.
According to court papers, Mashreq is seeking a jury trial and damages, including punitive damages, as well as a return of profits it may have made via the original derivative investments.
When contacted by Bloomberg, a spokesperson for ING said “as a matter of policy, we don’t comment on pending litigation”.