Facts
[X. AG] (Defendant) managed the assets located in Switzerland of the German national [A.] from around 1980. In 1986, the assets were transferred to the "[Y.] " Foundation (Plaintiff) established under Liechtenstein law, with its registered office in Vaduz. Until mid-1999, the assets were mainly invested in bonds. From May 1999 onwards, the Defendant began to invest the assets increasingly in stocks. In August 2001, the portfolio consisted of almost 100% highly speculative stocks of start-up companies in the internet sector. The Plaintiff then revoked the Defendant's asset management power of attorney and sued it for damages. The Commercial Court of the Canton of Zurich ordered the Defendant to pay the Plaintiff an amount of USD 479'980.-- plus interest. The Defendant appealed against this judgment.Considerations
The Federal Supreme Court dismissed the appeal. It found that a conservative investment strategy had originally been agreed between the parties. While the borrowing for the stock…