Couple sues Bloxham on €470,450 bond loss, court hears
Published 09/02/2010 | 05:00
A RETIRED couple who claim they lost more than €470,000 because of allegedly negligent advice about an investment bond from Bloxham Stockbrokers have brought a legal action against the firm.
The action by Desmond and Maura Ellison, of Annaglog House, Ardee, Co Louth, is the fifth raised in the Commercial Court against Bloxham over the same Dresdner bond.
The couple claim Bloxham wrote to them in early 2005 suggesting a number of options for reinvesting maturing funds and that a Dresdner bond was sold to them "as a low-risk product with no identified possibility of capital loss".
They claim Bloxham specifically represented to them that the bond was suitable for their needs as a retired couple and, on that basis, they invested around €485,000. It later emerged the investment was not what they thought and they had lost some €470,450 as a result, it is claimed.
The court was previously told Bloxham's is suing Morgan Stanley in the UK, alleging breach of contract on the bond but that claim is limited to €42.75 for every €100 invested in the bond.
It is alleged a "call option" exercisable by Morgan Stanley compromised the integrity of the Dresdner bond as a secure investment vehicle, and a "mandatory redemption event" exercised by Morgan Stanley had the net result that bondholders would only recover 3pc of their investment.
In an affidavit, Mr Ellison said they delayed bringing proceedings against Bloxham because of that firm's case against Morgan Stanley.
However, they had now initiated this court action after learning other investors, including the main insurance body for solicitors, the Solicitors Mutual Defence Fund, had taken proceedings over the same bond.
The proceedings, brought against a number of people who were allegedly partners in Bloxham at the relevant time and against FBD Securities Ltd, were admitted to the Commercial Court yesterday by Mr Justice Peter Kelly.