Investors to sue financial exchange, bank over forex losses+

TOKYO, Feb. 25 Kyodo - More than 40 investors will sue Commerzbank AG and the operator of the Tokyo Financial Exchange for a total of 220 million yen in damages for margin trading losses which they say they incurred due to an ''abnormal exchange rate'' of the
yen against the South African rand offered by bank via the bourse on Oct. 31, their lawyers said Thursday.

The 45 individuals from Tokyo and 14 other prefectures, who are in their 20s to
70s, and one corporate investor will file the suit with the Tokyo District
Court on Friday, each claiming damages ranging from about 150,000 yen to 69
million yen, according to the lawyers.
The German bank posted the abnormal rate significantly different from the day's
market rates via the bourse, which neglected to supervise the offered rate in
an appropriate manner, thus causing the investors who were led to conclude
margin trading contracts based on the rate to incur the losses, they said.
Concerning transactions implemented based on the abnormal rate, the bourse took
corrective measures for a separate group of about 450 investors who also
concluded contracts based on the rate.
But the plaintiffs who are filing the suit could not be bailed out through the
corrective measures because the process of establishing the amounts of their
trading losses had been delayed.
On Jan. 8, the government's Financial Services Agency said in a statement that
it ordered Commerzbank to improve operations on the ground that it ''posited a
significantly different rate for the Japanese yen against the South African
rand from the market rates, which caused settlements at an extreme rate.''
The bank provides to the bourse rates which are determined by adding spreads to
middle rates which are calculated by the bank's computerized system.
==Kyodo