UK investor accuses Crédit Agricole of forcing 'no-margin-call' Tesla liquidation

A UK-based investor claims Crédit Agricole's private bank sold him a "no-margin-call" Tesla hedge, then forced the very liquidation it promised to prevent. 

Those allegations sit at the heart of a newly filed lawsuit in the Southern District of New York, Berger et al. v. Crédit Agricole Group et al., No. 1:26-cv-03186. Damion Berger, a UK citizen, and his Monaco company SCI Golden Hour are suing Crédit Agricole Group, Crédit Agricole S.A., Crédit Agricole Corporate and Investment Bank, Crédit Agricole Securities (USA), Crédit Agricole America Services, and CFM Indosuez Wealth, the French bank's Monaco-based private banking arm. 

Between 2017 and 2022, according to the filing, Berger took on a series of multi-currency euro credit lines backed by U.S.-listed stocks, including 75,000 post-split Tesla shares. CFM allegedly pitched a package Berger describes as supposedly bulletproof: long Tesla put options paired with FX forwards and swaps that would wipe out both stock-price and EUR/USD currency risk. 

On recorded calls, a CFM representative allegedly told Berger the setup was "fully hedged," "self-financed," and carried "no risk of margin call." 

The reality, the suit claims, was the opposite. A 5,000,000 EUR forward executed on April 20, 2021 allegedly locked in the euro value of an unsigned 5,000,000 EUR first-demand guarantee between CFM and its parent, parking the bank's own exposure inside the client's account. 

From there, the suit alleges, the numbers got creative. CFM is accused of using an artificial blended EUR/USD rate of 1.221 and a 400,000 EUR "Buffer line" to mask a negative balance, quietly cutting the Tesla pledge weighting from 90% to 55%, and lowering FX margin requirements from 10% to 7% for this client only. An internal "Estimation of the pledge," which the filing claims would have shown the facilities underwater from day one, was allegedly never shared. 

When Berger later tried to rebuild his collateral with additional Tesla puts and calls in late 2022 and early 2024, CFM allegedly refused to execute the trades, while Crédit Agricole blocked just under 1,000,000 EUR of remaining drawable credit. On April 19, 2024, according to the complaint, the defendants liquidated the portfolio through CA Securities USA, the group's New York SEC-registered broker. 

The suit brings claims under Section 10(b) of the Exchange Act and SEC Rule 10b-5, Section 29(b) rescission, the Commodity Exchange Act and CFTC Rule 180.1, plus common-law fraud, conversion, civil theft, and unjust enrichment, seeking tens of millions in damages. 

For wealth advisors, the allegations land on familiar pressure points: suitability, conflicts of interest in in-house hedging products, and how clearly margin mechanics are explained to sophisticated clients. The claim that a bank's FX hedge quietly covered its own unsigned guarantee, while being marketed as a "perfect hedge," is the kind of fact pattern compliance teams will not want to see repeated. 

The allegations are untested. No court has ruled on the merits, and the defendants have yet to respond.