BNP Sees Trader’s ‘Fat-Finger’ Suit Downgraded by $185 Million

(Bloomberg) -- A trader suing BNP Paribas SA over a 163 million euro ($192 million) “fat-finger” mistake has downgraded his claim and is now hoping for a more modest 6 million euros.

The trader, who can only be identified as Armin S., said that seeking to recoup his full losses would dramatically increase the amount of money he would have to pay BNP in attorneys fees if he lost the case. He had sued the bank to enforce a December 2015 transaction where he found a typing error on the system that allowed him to buy a derivative for 326,400 euros instead of 163 million euros.

“The case by now has already cost me 60,000 euros, and that’s only the trial stage," he said in an interview. "Any appeals would increase the bill and if I lose, I will also have to pay the other side’s lawyers."

The bank errors at the heart of the case allowed him to buy the derivatives for 108.8 euros instead of 54,400 euros a piece. The mistakes weren’t noticed until a week after the December 2015 trade.

BNP spokesman Gueray Krutinat declined to comment.

Attorney Fees

Armin S. says he is a victim of complicated German rules on attorney fees and time limits. In Germany, the losing party in a lawsuit has to pay the legal costs for both sides, and the more money at stake, the higher the bills can be.
To reduce his exposure to BNP’s and his own costs, he initially only sued for 1 million euros, hoping for a swift ruling that would allow him to file a claim for the rest of the money later or even to prompt BNP to settle. And if he lost that first case, he would only be on the hook for limited legal fees.

But he took until 2017 to file the lawsuit and the first hearing in the case didn’t occur until May. At the hearing, the presiding judge hinted that there’s a chance the lender may not have to honor the trade if it can prove the mistake was the result of a computer error.

At the same time, the trader was facing Germany’s three-year statute of limitations on claims and a tough choice. He had to either file a claim for the full 163 million euros -- exposing himself to massive legal costs if he lost -- or stand pat with the 1 million euros.

Instead, Armin S. decided to seek 6 million euros, a bit more than the initial amount, but still shielding him from a massive legal bill at the end of the process. A hearing scheduled for this week was postponed after the new filing.

"You’re really dependent on how fast a case is being handled," the trader said. "The system just puts you in a predicament."

The case is: LG Frankfurt, 2-18 O 175/17.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Andrew Blackman

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