Frasers has asked a New York court to order Morgan Stanley chief executive James Gorman to produce evidence in a UK lawsuit it is pursuing against the bank over an almost $1bn margin call covering trades in Hugo Boss.
Frasers claimed in its 2021 lawsuit that the New York bank acted “arbitrarily” and “incorrectly” by trying to force the retailer to close options positions it had built in Hugo Boss, costing the company millions as a result.
Mike Ashley’s group is suing Morgan Stanley for £50m in damages.
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The retailer claims Morgan Stanley wrongly treated the company like a family-office investment vehicle because of Ashley’s large stake.
Ashley is reported to have offered up to £100m and his entire £1.9bn Frasers’ stake in collateral to meet the margin call but had his offer refused.
Frasers is now demanding that a US court compel Mr Gorman, who has run Morgan Stanley since 2010, to testify and produce documents in the case.
In the documents filed with a court in New York and seen by The Telegraph, the retail group said it wanted “to understand the extent to which the decisions to impose and maintain the Margin Call were driven (either directly or indirectly) by Mr Gorman”.
Morgan Stanley’s scrutiny of its business with family offices came after the collapse of Archegos Capital Management.
After the Archegos collapse, Gorman and Morgan Stanley senior management directed the bank’s prime brokerage to investigate and remove “family-office type” businesses, Frasers said, and that was one of the reasons that the firm “took an unusually hostile attitude” to the Hugo Boss position.
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