GLOBAL - AP1, one of the national Swedish buffer funds, is suing Bank of New York Mellon (BNYM) at the Commercial Court in London.

The lawsuit revolves around losses of $35.5m (€25.8m) incurred by AP1 in 2008, which the buffer fund attributes to a securities lending investment decision taken by BNYM on behalf of the fund.

On 19 November 2009, BNYM made a withdrawal of approximately $35.5m from an account it was managing at the time.

The withdrawal, which AP1 views as wrongful, has been accounted for in the fund's annual reports for 2008 and 2009 and in the results for 2008.

AP1 has argued that the investment decisions taken by BNYM - as the fund's securities lending agent - in stocks issued by Sigma Finance were careless and breached the fund's investment guidelines. Sigma went bankrupt in October 2008.

Johan Magnusson, chief executive at AP1, said the fund had for some time sought an agreement with BNYM without success, which is why they saw no other alternative but to take BNYM to court.

Magnusson added that he was confident AP1 had a strong case. 

A spokesman at BNYM in London said: "We have not yet had an opportunity to review this complaint and so cannot comment on the matter at this time."