Diamond dealer Benni Dabush believes he was duped into losing 3 million dollars by foreign exchange traders at the HSBC bank in Geneva. 011112. Picture: Chris Collingridge 416

Johannesburg - An Israeli diamond dealer who lives in Joburg has sent legal letters to the world’s biggest bank, claiming it manipulated him into losing R47.8 million over a decade.

Businessman Reuben Benni Dabush was a client of banking giant HSBC for more than 10 years.

He traded in forex with the bank and said it had got him addicted to the trading game, encouraging him to lose money - contrary to banking ethics and laws.

Andrew de Jongh, an attorney, is representing Dabush. He said the diamond dealer is claiming that he had suffered losses because he was denied access to the dealing room and because bank managers had contacted him, encouraging him to trade.

Both actions are unethical in terms of the banking laws.

“He was refused access to the dealing room when he wanted to exit a trade, leading to massive losses when he needed to get out,” said De Jongh.

De Jongh said that when he contacted the bank in Geneva, it denied any wrongdoing, claiming that Dabush was an experienced trader and knew what he was doing.

He also contacted the Swiss banking ombudsman, but was told there was no proof of wrongdoing.

De Jongh said the next step was for them to sue HSBC to recover damages.

HSBC had believed Dabush to be a professional trader because of the large volume of trades he did, but he didn’t really know what he was doing, De Jongh said.

The bank has offices in South Africa, but does not have a trading licence. Head of marketing at HSBC Africa, Isabel P Correia, declined comment, citing client confidentiality.

HSBC has faced several international scandals recently and has been found to be involved in money laundering, manipulating the silver price and even drug smuggling.

In the past week, it has emerged that HSBC has to pay $1.5 billion (R13.4bn) in fines to US authorities after subsidiaries had funnelled money for drug runners and Iran through the bank in breach of money-laundering laws.

In Britain, there is an investigation after it emerged the bank held offshore accounts in Jersey for some criminals who live in Britain.

The French media have reported that a group of rich Parisians thought they were withdrawing large amounts of cash from hidden Swiss accounts under the radar of tax authorities when in fact they were receiving bags full of banknotes allegedly coming from street drug-dealing.

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The Star