Commerz Bank to face swap rates action

After two leading US banks were under the limelight for FX pricing the troubles have drifted across the atlantic and Germany's 2nd largest bank is under question for promoting a product that was not deemed suitable for its client.

Metal processing company E. Ziegler Metallbearbeitung AG has filed a suit against Commerzbank AG in connection to an Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate-based swap product the bank sold to Ziegler, a lawyer for the plaintiff said.

A lawyer for the law firm Roessner called the product, a Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term-linked swap based on the euro and Swiss franc, misleading and accused Commerzbank of deceit and giving poor advice.

"The bank sold the client a product that was of no benefit to him, which was structured to his disadvantage, and with which he could lose everything," the law firm said in an email Saturday, adding that Ziegler faces EUR1.1 million through the deal. Ziegler filed the suit Feb. 29 in a Stuttgart regional court.

Roessner brought a similar case to court against Deutsche Bank AG last year. At that time, it was ruled that Deutsche had to pay hygiene products manufacturer Ille Paper Service more than half a million euros because it didn't sufficiently inform the customer of the risks involved in a so-called Spread Ladder Swap.

Under FSA guidelines financial professionals have to ensure products are suitable for clients post MIFID. In the margin trading business firms have to prove that they have done enough to ensure the client understands the product, the risks and is suitable to their requirements.