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Abu Dhabi: Abu Dhabi Commercial Bank (ADCB) has announced that it will participate in a class legal action in New York, which the company deemed as a positive step aimed at recovering losses suffered by ADCB and other GCC investors from US asset-backed securities investments.
ADCB will act as the named plaintiff in the class action, which has arisen as a result of investment in the Cheyne structured investment vehicle (SIV).
The Cheyne SIV, structured, sponsored and rated by a leading US investment bank and the leading rating agencies, was one of the largest investment vehicles set up to invest in US asset-backed securities, including residential mortgages.
The Cheyne SIV entered receivership in September 2007. ADCB has already fully disclosed any losses it suffered from these investments.
The class legal action will be one among dozens of legal actions already filed in the US by global investors against large, global financial services firms related to investments in asset-backed securities.
The legal action alleges, amongst other things, that ADCB was misled about the quality of the underlying mortgages in which the Cheyne SIV would invest.
ADCB's Chief Executive Officer, Eirvin Knox, commented: "This is the next step in a process aimed at recouping the losses ADCB has already incurred, and additionally, this is an important step in paving the way for other GCC investors to ensure they are provided an opportunity to recover their own losses. This is the right thing to do and ADCB has taken a proactive early lead to protect itself and other investors."
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