April, 19, 2010

Merrill Lynch & Co.’s attempt to recover $9.4 million from a former private-banking client began in a Singapore court today, highlighting the challenges of servicing the wealthy in Asia.The Bank of America Corp. unit said Indonesian businessman Prem Harjani defrauded it in 2008 over shares in PT Triwira Insanlestari he instructed it to purchase for him, according to court documents.Harjani has sued the New York-based bank in a Jakarta court for $90 million over the shares and an unspecified amount in Singapore.

Merrill, Citigroup Inc., UBS AG and Morgan Stanley have been sued by Asian clients after the global financial crisis erased $1.77 trillion of wealth. Citigroup settled a lawsuit with Singapore tycoon Oei Hong Leong, while a former Goldman Sachs Group Inc. banker was banned from the industry in Hong Kong for making unauthorized trades for a client.One challenge facing private banks is the balance between offering clients the opportunity for returns in volatile markets while ensuring they have accepted the risks,” said Montague Choy, a partner at Singapore-based Clifford Law LLP who isn’t involved in the suit.

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