⏱ 1 min 30 read
Background
A Mexican businesswoman opened an account with a Geneva bank in 2008. In September 2009, she signed a power of attorney in favour of her son, who was free to manage the assets as he wished. The son invested the money in very risky funds.
The key points
The Federal Supreme Court rejected the client's appeal against the bank in a ruling published on Friday 30 October 2026, according to the ATS news agency as reported by Blick. She was claiming 3.6 million dollars.
The funds chosen by the son carried leverage of up to three times the amount invested. The bank's manager had advised him to hold a more prudent portfolio, 75% in Swiss franc bonds. The son did not follow this advice.
The judges classify the relationship as a simple custody agreement (execution only): the client, represented by her son, alone decided on investments. In this framework, the bank has no general duty to safeguard the client's interests. Through the power of attorney, the mother is bound by her son's actions.
Key figures
- More than 4 million dollars : account assets in 2008
- Less than 30,000 dollars : assets at the end of 2019
- 3.6 million dollars : amount claimed from the bank
- 20,000 francs : court costs borne by the client
- 22,000 francs : bank's legal fees to be paid by the client
What it means for businesses
- Banks : under “execution only”, they are not liable for losses decided by the client or their representative.
- Clients : a power of attorney legally binds the account holder, including for risky investments.
Further reading
Sources
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