We are representing our Russian client in a Cyprus district court in Limassol in a dispute arising out of breach of the portfolio management agreement and commission of the tort of negligence by a Cypriot investment company that breached its duty of care towards the client.
Our client who is an individual has entered into a portfolio management agreement with a licensed Cypriot investment company where under the CyCom was obliged to render investment services and/or perform certain investment activities in favour of our client.
The client has invested a certain amount of funds into one of the capital protection strategies offered by the CyCom in accordance with their Portfolio management rules. The strategy that our client has chosen was described as the one aimed at protecting the portfolio from its decrease in value and at gaining income from investing of only a small part of assets in high-risk-level instruments. The strategy risk level was indicated as low and the strategy type – as moderate – conservative.
At the same time after a while the client has found out that despite his clear and written instructions the investment company has transferred the client’s funds into a different portfolio management strategy with medium risk level which also allowed the investment company to invest client’s funds into high-risk-level instruments.
As a result of a default of the issuer which bonds were purchased with the client’s funds, the market value of the client’s portfolio went down to as low as just 22% of the amount initially invested.
In this civil claim we demand that the investment company should reimburse the client’s losses suffered due to the breach of the client’s instructions, pay the accrued interest over the investment sum in the amount of 7,5% per annum and reimburse the client’s legal expenses.
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