Stockholder Sues Chemical Bank Because of $70 Million Peso Losses
NEW YORK (AP) _ Chemical Banking Corp. was sued Wednesday by a stockholder who contends officers improperly supervised an employee whose unauthorized bets on the Mexican peso cost the bank $70 million.
Howard Weinstock charged that Victor Gomez’s ``reckless, improper and unauthorized trading in Mexican pesos″ wasted Chemical’s assets and harmed the bank’s reputation for sound management.
Chemical said a vice president in the foreign currency division bet on the future price of the peso ``in violation of authorized risk limits,″ and then hid the transactions. Chemical said it didn’t anticipate any further impact from the transactions.
The bank didn’t name the trader but sources said he had been fired.
Chemical’s losses occurred when the peso plummeted about 30 percent in value in late December after the Mexican government devalued the currency.
The lawsuit, filed in state court in Manhattan, names Chemical board chairman W.V. Shipley, board vice chairman William B. Harrison Jr. and 18 members of the bank’s board of directors.
Chemical is one of the largest currency trading banks in the country.