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In the mid-1990s, BT Securities Corporation, now part of Deutsche Bank, was involved in two landmark legal cases that helped clarify the duties and responsibilities of swap dealers and their customers.

The first case involved Gibson Greetings, Inc., a manufacturer of greeting cards and related products. Gibson sued BT for losses on two swap transactions where BT was the dealer. The contracts in dispute represented the cumulative position resulting from 27 earlier transactions. Of the 29 transactions between Gibson and BT, many involved the termination of one position in exchange for entering into another position. This process requires agreement between the parties as to the terms that will equate the market value of the terminated swap (or swap portion) to the value of the new position ...

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