Wealthy Chinese businessman Guo Wengui is suing Swiss investment bank UBS in London in an attempt to reclaim $500 million he lost after the bank called in a margin loan in 2015, Bloomberg reported Friday.
This is the second time Guo, who has lived in New York in self-imposed exile for several years, has sued UBS over this issue. In 2016, the New York Supreme Court dismissed Guo’s claims because of the court’s lack of personal jurisdiction over UBS.
According to Guo, UBS pressured him to borrow money tied to the purchase of shares in Chinese brokerage Haitong Securities Co. UBS then forced the sale of the stock when Haitong’s Hong Kong-traded shares plunged 45% in July 2015, wiping out Guo’s investment.
UBS spokesperson Huw Williams said the investment bank “strongly disagrees with the claim and will vigorously defend itself.”
Guo told the New York Supreme Court in 2016 that he and his colleagues were not aware that their agreement with UBS allowed the bank to issue a margin call without providing ample time to meet it.
According to Bloomberg, Guo said in his London legal filing that UBS told him to structure the deal through an intermediary to avoid breaching thresholds that would have required him to disclose his holding. He agreed that his shares in Haitong would first be acquired by a Chinese state-backed investment fund, but after dumping the stock, UBS passed on the loss to Guo.
A lawyer for Guo said in the filing that UBS also had internal policies not to make margin calls to “highly valued customers” such as Guo if prices tied to the loan moved in the short term, Bloomberg reported.
A vocal critic of the Chinese establishment, Guo fled China in 2014 and entered the U.S. the following year to avoid arrest by Chinese authorities on at least 19 criminal charges, including bribery, kidnapping, fraud, money laundering and rape. Guo has denied the allegations.
In recent years, Guo has befriended former White House chief strategist Steve Bannon. Earlier this year, the duo launched a political movement, called the New Federal State of China, aiming to overthrow the Chinese Communist Party.
In August, Bannon was on Guo’s yacht off the Connecticut coast when he was arrested on charges of conspiring to funnel hundreds of thousands of dollars from a campaign to raise funds for a wall between the U.S. and Mexico.