Full opinion text
OPINION and ORDER FILE UNDER SEAL KEENAN, District Judge. Before the Court are cross-motions for summary judgment pursuant to Fed. R.Civ.P. 56. Defendants Minmetals International Non-Ferrous Metals Trading Company (“Non-Ferrous”) and China National Metals & Minerals Import & Export Corporation (“Minmetals”) move for summary judgment dismissing the Amended Complaint in this action, and Non-Ferrous moves to have judgment granted in favor of its Eighth Counterclaim. Plaintiffs Lehman Brothers Commercial Corporation (“LBCC”) and Lehman Brothers Special Financing, Inc. (“LBSF”) move for the following: (1) summary judgment on Counts One, Two, Four, and Five of the Amended Complaint; and (2) summary judgment on the affirmative defenses asserted by Defendants, except for the affirmative defense claiming failure to mitigate damages. Counterclaim Defendants Lehman Brothers, Inc. (“Lehman”), LBCC, LBSF, Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited, and Lehman Brothers Capital Co. (H.K.) Limited also move for summary judgment on the counterclaims asserted by NonFerrous. For the reasons that follow in this Opinion and Order, the Defendants’ motion is denied. The motions by the Plaintiffs and the Counterclaim Defendants are granted in part and denied in part. The Court reserves decision on aspects of both sides’ motions, as discussed in this Opinion and Order. BACKGROUND From 1992 to 1994, Lehman subsidiaries were involved in a foreign-exchange (“FX”) and swap-trading relationship with Hu Xiangdong (“Hu”), an employee of Non-Ferrous. Non-Ferrous was itself a subsidiary of Minmetals. This case for contract damages, tort damages, and declaratory relief stems from the demise of that relationship. The Parties Lehman is a global investment bank that offers a wide range of financial services. Lehman is headquartered in New York and maintains over thirty-five offices worldwide. LBCC is a booking vehicle for Lehman that books transactions in the foreign exchange markets. See Rubinstein Aff. in Supp. of Defendants’ Mot. for Summ. J., Ex. 9, at 252, 418-19; Rl. Ex. 19, at 243, Ex. 3, at 16, 18-19. LBSF is a booking vehicle for Lehman that books interest-rate and other forms of swap transactions. See Rl. Ex. 9 at 252, 407-08, Ex. 3 at 16, 18-19. Neither LBCC nor LBSF have any employees, offices, or telephones of their own. They both are Delaware corporations. As evidenced by the facts of this case, both LBCC and LBSF, at least some of the time, serve as principals in transactions with counterparties. Minmetals is the parent corporation of the Minmetals Group, an international trading conglomerate that conducts business throughout the world and trades in more than 100 countries and regions. See PI. Ex. 1. Minmetals is headquartered in Beijing in the People’s Republic of China (“China”), is owned by the State, and reports directly to China’s Ministry of Foreign Trade and Economic Cooperation. Id. Non-Ferrous is a wholly-owned subsidiary of Minmetals and is located in the same building as Minmetals. See PI. Exs. 2,15. The Establishment of a Foreign Exchange Relationship Non-Ferrous initially opened an account with a Lehman affiliate — Lehman Brothers Commodities Limited (“LBCL”)— sometime before the Fall of 1992 for trading on the London Metals Exchange (“LME”). After opening that account, Non-Ferrous sent LBCL communications identifying the Non-Ferrous employees that were authorized to place LME transactions through LBCL on Non-Ferrous’ behalf. See R2. Ex. 15, at LM 3271, NF 1703, LM 32. Hu, an employee of NonFerrous, was not listed among those with authorization and had no role in opening the LME account. In the Fall of 1992, Lehman personnel traveled to China as part of an active effort to solicit Chinese FX business. See Rl. Ex. 13, at 174-77. During that trip, Lehman employees Timothy Potter, Jeremy Hodges, and May Tse met with Hu. Potter, an LBCC salesperson, went to Beijing to meet with Hu on the recommendation of a long-time customer. See PI. Ex. 14, at 1354. Potter’s customer had indicated that Hu wanted to establish an FX trading relationship with Lehman, and Potter made the trip in hopes of establishing such a relationship. Id. at 1354-55. During the meeting, Hu presented his business card to Potter. The card read, at top, “China National Metals & Minerals Imp. & Exp. Corp.” See PI. Ex. 15. Directly under that heading, the card read, “International Non-Ferrous Metals Trading Co.” Id. The card then identified Hu as “General Manager — Non-Ferrous Metals.” Id. Before that meeting in Beijing, Potter had met with James Bedford, an LBCL salesperson, to discuss LBCL’s LME relationship with Non-Ferrous. See PI. Ex. 14, at 1355. Potter learned from Bedford that Non-Ferrous was an established LME customer in good standing with LBCL. Id. at 1355-57. Although Lehman claims in its papers that Bedford confirmed at that time that Hu was an authorized trader for Non-Ferrous, neither Potter nor Bedford make such a claim. Bedford does not recall when Hu became authorized to trade for Non-Ferrous on the LME, and Potter has not stated that Bedford told him anything about Hu. See R2. Ex. 10 at 246-49; PI. Ex. 14, at 1355-56. At the Fall 1992 meeting, Potter reviewed Bedford’s file on the Minmetals companies and noticed a Letter of Undertaking signed by both Minmetals and Non-Ferrous. The Letter of Undertaking indicated that the LME account was opened to allow Non-Ferrous to trade on the LME, and that Minmetals acted as Guarantor for any liabilities incurred by Non-Ferrous. See PI. Ex. 17, at LM 000502. The Letter of Undertaking stated that LBCL was to place at Non-Ferrous’ disposal “facilities in respect of [Non-Ferrous’] operations on all or any of the world’s commodity, bullion, metal, securities, foreign exchange, index, financial instruments and options markets and future markets of any sort.” Id. After Hu’s Beijing meeting with the Lehman personnel, Hu agreed to begin FX trading with LBCC on Non-Ferrous’ behalf. This FX relationship in no way involved the LME account. Hu maintains that he agreed to commence FX trading because Lehman had been calling him regularly with market and trading advice and to recommend FX transactions to him. Hu claims that in making his decision to begin FX trading, he relied on Lehman’s representations that it would make specific recommendations to him and would execute his transactions at a favorable price. See Hu Aff. ¶ 18. Hu maintains that he did not understand that LBCC was to be a principal in these transactions; instead, he believed that LBCC was his agent and advisor, and that Potter and he were “a team.” Id. ¶ 29. The opening of Non-Ferrous’ FX trading account with LBCC did not proceed smoothly. On November 26, 1992, Hu executed a Commodity Terms and Conditions Agreement and Supplement. See PI. Ex. 19. Hu executed the agreement in China and faxed a copy to Potter in London. Although the fax cover sheet was written on Minmetals letterhead, it was clearly sent by Non-Ferrous, even though it was faxed after normal business hours from the offices of a company unrelated to either Minmetals or Non-Ferrous. See id.; R2. Ex. 23, at 728-31. The FX account was opened in Minme-tals’ name: “China National Metals and Minerals Imp + Exp Corp.” See PI. Ex. 19. Potter claims that he used Minmetals’ name in the agreement because Hu had instructed him to do so. See R2. Ex. 23, at 727-29. Hu, on the other hand, claims that he had intended to open the account in Non-Ferrous’ name. See Hu Aff. ¶ 26. Hu states that Potter told him that he would fill out the account title for him, and Hu assumed that Potter would use NonFerrous’ name. Hu says he signed the agreement without realizing that Potter had used Minmetals’ name on that agreement. Id. ¶¶ 26-27. Hu claims that within two weeks after signing the agreement and after the initial FX transaction was placed, he realized that Potter had used Minmetals’ name rather than Non-Ferrous’ name. Hu says that when he told Potter of the mistake, Potter assured him that he would quickly correct it. Id. ¶ 27. Potter states that Hu directed him to transfer the account from Minmetals to Non-Ferrous. See PI. Ex. 21. In any event, on December 8, 1992, Hu executed an identical Commodity Terms and Conditions Agreement and Supplement in Non-Ferrous’ name. See PI. Ex. 22. Hu executed the agreement in China and faxed it on Non-Ferrous letterhead from Non-Ferrous’ office to Potter in London. The agreement designated New York law as its governing law and provided for Non-Ferrous’ payment of collateral — known as margin — under certain circumstances. The agreement stated that Lehman would have the right to liquidate its transactions with Non-Ferrous in the event that Non-Ferrous did not meet its margin obligations. See PI. Ex. 24. It required that Non-Ferrous pay any deficiencies remaining after such a liquidation. Id. At the same time that Hu executed the second agreement, he also signed a purported guarantee from Minmetals (the “Guarantee”). See PI. Ex. 22, at LM 00029. The Guarantee was drafted by Lehman and then signed by Hu as “General Manager.” See Rl. Ex. 3, at 24; PI. Ex. 22, at LM 00029. Hu claims that he signed the Guarantee because Lehman required this form for him to trade. He states that he did not have the authority to do so because he never worked for Minme-tals. See Hu Aff. ¶ 28. Hu claims that he asked Potter how he could guarantee his own trading, to which Potter replied, “[Djon’t worry about it, it is just a form needed for the files.” Id. After Hu executed the Commodity Terms and Conditions Agreement, neither anyone in Lehman’s Credit Department nor any of Lehman’s FX salespeople sought any evidence that Hu had the authority to open an FX account on NonFerrous’ behalf. See, e.g., Rl. Ex. 9, at 72-73; R2. Ex. 33, at 74, Ex. 23, at 367-68, 424. Nor did anyone at Lehman inquire about or obtain any governmental license or authorization for FX trading from Hu, even though its credit personnel and salespeople apparently understood that some form of governmental authorization was needed. See Rl. Ex. 9, at 61, Ex. 10, at 102-03, Ex. 5, at 105, Ex. 12, at 76. Lehman’s Credit Department disclaimed responsibility for making such an inquiry, and its Commodity Administration Department did the same. See Rl. Ex. 9, at 220-21, Ex. 18, at 162-63, Ex. 19, at 98-99, Ex. 20, at 120-21. Despite this lack of due diligence, Lehman’s Credit Department allowed NonFerrous to hold positions of up to $50 million. See R2. Ex. 39. Lehman increased this limit to $100 million within a few weeks’ time, and eventually increased it to $1 billion. See R2. Ex. 40-42, 17. Lehman’s Credit Department approved these increases without ever examining a financial statement or communicating with anyone at Non-Ferrous about Hu’s trading. See R2. Ex. 33, at 44, 99-100, 138-39, 529-30. Lehman’s Credit Department’s decisions to do FX business with NonFerrous and increase Non-Ferrous’ position limits were made on a “business-decision” basis, which meant that Lehman was prepared to do business with Non-Ferrous even without the financial information that was needed for an informed credit determination. See R2. Ex. 33, at 44-45, Ex. 44, at 57-59. The Progression of Norir-Ferrous’ FX Trading Hu was promoted to the position of General Manager of Non-Ferrous’ Futures Department in February 1993. According to LBCL, that was the first date that Hu began trading for Non-Ferrous’ LME account. See R2. Ex. 20. Consistent with its practice, Non-Ferrous sent LBCL a letter dated February 2, 1993 authorizing Hu to trade for Non-Ferrous’ LME account. See R2. Ex. 19. The letter was signed by a vice-president of Non-Ferrous, Guo Xianqian. Id. Throughout 1993, Hu entered into many FX transactions with LBCC. During this time, Hu engaged in FX options, forwards, and spot transactions. Hu claims that he branched out into forward and spot trading at Lehman’s urging and suggestion of more lucrative profits. See Hu Aff. ¶ 62. These transactions proceeded smoothly. Throughout 1993, whenever Non-Ferrous’ FX trading generated a margin call, the required funds were provided promptly. See PI. Ex. 25. By February 1994, NonFerrous had earned over $30 million from its FX trading with Lehman. Between late 1993 and early 1994, Cao Yongfang (“Cao”), President of Non-Ferrous, signed three money-transfer forms directing more than $42 million into NonFerrous’ FX account at Lehman. See PI. Ex. 33. The transferred funds came from a larger amount that China’s State Reserve Bank had transferred to Non-Ferrous in order to purchase copper. NonFerrous admits that Cao authorized these transfers, but maintains that Cao thought the money would go into Non-Ferrous’ LME account at Lehman rather than Hu’s FX account. See Cao Aff. ¶¶ 16-18. Hu claims that he transferred the $42 million into Non-Ferrous’ FX account after arranging a favorable interest-rate deal with May Tse at Lehman. See Hu Aff. ¶ 59. After Lehman agreed to pay the favorable interest rate, Hu informed Cao that he had arranged such a deal, but he led Cao to believe that the money would be deposited in the LME account. Id. ¶¶ 59-60; Cao Aff. ¶¶ 21-24. Based on these representations by Hu, Cao authorized the transfers of $42 million and had Hu prepare the paperwork. See Hu Aff. ¶ 60; Cao Aff. ¶¶ 22-23. Cao claims that he signed off on the transfers because as far as he knew, Non-Ferrous had only one account with Lehman — the LME account. See Cao Aff. ¶¶ 23-24. Hu realized that by having this money transferred into the FX account at Lehman, he could increase his trading volume and still be protected against margin calls. See Hu Aff. ¶ 63. After the transfer, Lehman increased Hu’s trading limit to $1 billion. See R2. Ex. 17. Hu’s FX trading volume grew in response to this increase. From 1993 to early 1994, Hu’s trades earned profits. On two occasions between November 1993 and January 1994, Hu directed Lehman to transfer some of his profits to third parties. In November 1993, Hu asked Potter to transfer $5.1 million from the Non-Ferrous account to an account in Brooklyn under the name Sinormet. On November 18, 1993, Lehman transferred the money to Sinormet’s Citibank account. See R2. Ex. 84; Hu Aff. ¶¶ 69-70. Sinormet was an entity that Hu claims he created in private. Hu Aff. ¶¶ 68-69. Hu states that he had no authority to order this transfer, that it was done without the knowledge of anyone at Non-Ferrous, and that nobody at Lehman questioned him or investigated why he ordered a transfer to a third party. Id. ¶¶ 69-70. In January 1994, Hu directed Lehman to transfer $10.2 million from the FX account to the account of Senior Market Ltd. On January 31, 1994, Lehman transferred the money to Senior Market’s account. See R2. Ex. 85; Hu Aff. ¶ 71. Senior Market was a company controlled by the same client of Potter who first introduced Hu to Potter in 1992. See Hu Aff. ¶ 71. Again, Hu claims he had no authority to order such a transfer, that the transfer was done without the knowledge of anyone at Non-Ferrous, and that Lehman simply transferred the money without inquiring into why the money was being transferred to a third party. Id. ¶ 72. Hu maintains that throughout his FX trading with LBCC he relied upon the advice and recommendations of Potter and his FX colleagues, along with that of Lehman economists. Id. ¶ 30. He claims that he trusted and followed that advice because he believed in the integrity of Potter and Lehman. Id. He claims that Lehman promised to give him fair pricing and offer him better prices than other small investors. Id. ¶¶ 32-33. Hu maintains that he had no access to the FX market except through Lehman, and thus relied on Lehman to keep him apprised of how his transactions were faring. Id. ¶ 36. All in all, Hu believed, based on what Lehman told him, that Lehman was his “trusted broker, doing its best to maximize [Hu’s] profits.” Id. ¶ 33. Lehman disputes Hu’s account of the FX relationship between LBCC and NonFerrous. Lehman denies that it behaved any differently from any FX dealer that enters into principal transactions with counterparties. See, e.g., PI. Ex. 26. Lehman claims that it was clear that LBCC and Non-Ferrous were dealing with each other at arm’s length, with each party as a principal to the FX transaction. See, e.g., PI. Ex. 31. Lehman claims that Non-Ferrous always made its own decisions about pricing and trades, and that it never delegated discretionary trading authority to Lehman. Lehman claims that it merely described market conditions, gave certain opinions, and made suggestions, and that the ultimate trading authority rested with Non-Ferrous. See PI. Ex. 26. Nortr-Ferrous’ Swap Transactions During the time that the State Reserve Bank money was transferred to Non-Ferrous’ FX account at Lehman, Hu opened yet a third account (the “Swap Account”). Hu entered into two interest-rate swap transactions with LBSF. Lehman claims that Hu proposed the idea of an interest-rate swap in an effort to boost the FX account’s rate of return. See PI. Ex. 34. Hu claims that once the money was transferred, Lehman employees approached him about entering into all sorts of derivative transactions. See Hu Aff. ¶¶ 76-77. Lehman allegedly urged Hu not to keep the money in the FX account, saying, “only old ladies put their money in cash accounts.” Id. ¶ 76. George Koo was the LBSF salesman who primarily handled Hu’s swap trading. Hu maintains that Koo pitched interest-rate swaps as safe investments that were guaranteed to return a good yield. Id. ¶ 78. In November 1993, Hu entered into an interest-rate swap transaction with LBSF. Hu documented the swap by executing a confirmation in China. See PI. Ex. 38. The confirmation stated that New York law governed the transaction, and contained a clause that permitted either party to terminate the swap if its exposure exceeded $5 million at any given time and margin was not posted to meet that exposure. Id. The November swap was a two-year bet on the movement of German interest rates. See R2. Ex. 57, at 8. The notional amount of the swap, the amount upon which the swap payoff is based, was listed on the swap confirmation as $50 million. But, because of a leverage factor in the swap’s formula, the actual notional amount was $500 million. See PI. Ex. 38. Hu claims that he did not know about the leverage, and that Lehman never explained to him that the swap transaction was leveraged. See Hu Aff. ¶ 79. After Hu entered into the first swap, Lehman told Hu that it needed a letter from his boss authorizing him to engage in swap transactions. To that end, Lehman allegedly drafted an authorization letter for Cao to sign, and sent it to Hu. Id. ¶ 80. Hu, knowing that Cao could not read English, told Cao that his signature was needed to effectuate the higher rate of interest that Hu had told Cao that NonFerrous would earn. Id. Cao signed the letter, thinking that it would help return a higher interest rate on Non-Ferrous’ LME account. See Cao Aff. ¶25. Cao claims that nobody from Lehman contacted him about this authorization letter. Id. ¶ 27. Hu claims that after he entered into the first swap transaction, Lehman continued to propose swap transactions to him. See Hu Aff. ¶ 87. In February 1994, Hu eventually entered into another interest-rate swap with LBSF. This transaction was a one-year bet involving the movement of interest rates in Japan. This transaction was also leveraged, this time with a leverage factor of fifteen. See PI. Ex. 39. Therefore, the notional amount was $450 million, not the $30 million listed on the confirmation. Again, Hu claimed that he had no knowledge of the leverage, and that Lehman never explained it to him. See Hu Aff. ¶ 83. Shortly after entering into the second interest-rate swap, Hu became concerned about the swap’s value. When Lehman advised him of a temporary market movement in his favor that would enable Hu to get out of the swap, Hu agreed to terminate the transaction. See PI. Ex. 40; Hu Aff. ¶ 88. Lehman paid Hu a termination fee of $50,000. Lehman’s establishment of Non-Ferrous’ swap-trading account was characterized, like its handling of the FX account, by certain irregularities. According to Lehman policy, Lehman commonly documented swaps it booked by entering into an International Swap Dealers Association (“ISDA”) Master Agreement with the party to whom it sold the swap. See R2. Ex. 36, at LM 16024. After entering into the first swap with Hu, Lehman asked him to execute an ISDA Master Agreement. Although Lehman prepared a draft of the agreement, Hu never executed it. See R2. Ex. 38, at LM 924-60, Ex. 101, at ML 210; Hu Aff. ¶ 86. As a result, Hu never provided Lehman with certain documents that the ISDA Master Agreement required from Non-Ferrous. These documents included copies of Non-Ferrous’ business license and articles of association, as well as the “[ajpproval of each transaction by the State Administration of Exchange Control.” See R2. Ex. 38, at LM 946. Under the ISDA Master Agreement, therefore, Lehman was supposed to obtain proof of such approval on or before entering into the swap transaction. Id. Lehman’s Credit Department approved the swap transactions with Non-Ferrous without ever investigating Non-Ferrous. George Koo admitted that the Credit Department’s approval resulted from the pressure he himself placed on the credit officer, combined with the strength of the Non-Ferrous name. See R2. Ex. 51. Potter remained in close contact with Hu during Hu’s association with Lehman’s swap personnel and attempted to protect him from risky transactions involving swaps. For example, in May 1994, Lehman’s swap personnel approached Hu about restructuring his Deutsche Bull Swap. Potter, upon hearing of this, became worried that the deal was too risky for Hu because he felt that Non-Ferrous “[was not] so sophisticated.” See R2. Ex. 120, at 199. Potter believed that the transaction was “absolutely ridiculous,” and therefore decided to advise Hu against it. See R2. Ex. 119, at 376. Potter was confident that he could persuade Hu not to enter into the restructuring because of his “very strong relationship” with Hu. See R2. Ex. 120, at 199. He subsequently advised Hu not to enter into the restructuring because of the risk, and Hu followed his advice. See R2. Ex. 122, at 212-13, Ex. 123, at 403-04. The swap restructuring incident is not the only example of Potter’s strong relationship with Hu. As Sheng Yan, an LBSF salesperson, commented to Potter after his initial meeting with Hu, “I’m pretty impressed, actually. I mean, obviously you are very good friends.” See R2. Ex. 28, at 99. Potter acknowledged the strength of his relationship with Hu, and stated that he had “quite a strong relationship on the currency side” with Hu. Id. In a report to his boss, Potter noted that Hu “trades cash FX and options, on our ideas.” See R2. Ex. 25, at 14767. Hu maintains that his FX and swap trading accounts with Lehman were not authorized by Non-Ferrous, and that throughout his trading with Lehman, he was the only person that Lehman dealt with at Non-Ferrous. See Hu Aff. ¶¶ 22-23, 40-50. Hu claims that nobody at Lehman ever demanded any proof of his authority to trade FX with Lehman on NonFerrous’ behalf. Id. ¶ 40. Lehman disputes Hu’s claim that he lacked authorization from Non-Ferrous. However, Lehman has not shown that anyone from its credit or operations departments communicated with anyone at NonFerrous other than Hu concerning the FX or swap trading. Andrew Fately, Lehman’s head of FX options trading, cannot recall the name of anyone at Non-Ferrous other than Hu. See R2. Ex. 92, at 138-39. Potter admits that he never spoke with anyone at Non-Ferrous other than Hu until the end of July 1994. See R2. Ex. 23, at 367-68, 484. Potter also admits that nobody in Lehman’s FX department ever met with Cao before August 1994. See R2. Ex. 94, at 00012. Neither Yang Shen nor George Koo, the two swap salespeople that dealt with Non-Ferrous, ever met or communicated with Cao during the period of Hu’s trading. See R2. Ex. 95, at 94, Ex. 13, at 495. The Margin-CaU Crisis In 1994, the United States Federal Reserve Board (the “Fed”) began a series of interest-rate hikes that dramatically raised interest rates in the United States. The Fed’s actions caused the dollar’s value to fall and, as a result, market participants who had anticipated a strong dollar incurred substantial losses in their transactions. The Fed’s actions caused losses in Non-Ferrous’ FX and swap positions. By June 1994, Non-Ferrous’ collateral in the FX account (the money that was transferred initially by the State Reserve Bank) was used up, and Lehman issued a series of margin calls to Non-Ferrous. These margin calls eventually totaled over $46 million. See R2. Ex. 127. On June 23, 1994, Hu agreed to a payment schedule under which the margin calls would be met by a series of installment payments. See PI. Ex. 44. Lehman received one payment of $5.1 million on June 24, 1994, see PI. Ex. 45, but Hu subsequently failed to keep up with the rest of the installment plan. During this time, no one at Lehman attempted to contact anyone at Non-Ferrous other than Hu. See R2. Ex. 31, at LM 18235-37. In late July 1994, Lehman contacted Cao because it was no longer able to reach Hu. Lehman states that after it contacted Cao, Cao sent Lehman a letter taking the position that Hu’s activities in FX and swap trading were unauthorized. See PI. Ex. 47. According to Hu, Hu realized by mid-July that his hopes for a market recovery were futile, and thus confessed all of his unauthorized trading to Cao. See Hu Aff. ¶¶ 113-14. Cao claims that this confession was the first he heard of Hu’s FX and swap trading, or of the existence of these accounts. See Cao Aff. ¶ 29. Cao states that the confession prompted him to write his letter to Lehman, and that Lehman did not call him until after that letter was sent. Id. ¶¶ 32-34. On August 1, 1994, Lehman liquidated the outstanding FX transactions and the first swap transaction. The proceeds from the liquidation went to satisfy Non-Ferrous’ margin calls, but Non-Ferrous still owed Lehman $44.75 million for the FX transactions and $8.8 million for the swap transaction. See PI. Ex. 51. Lehman, through its subsidiaries LBCC and LBSF, brought the instant action when Non-Ferrous and Minmetals refused to pay the amounts outstanding and the parties’ attempts to resolve the matter without litigation failed. Liquidation of the Thai NCDs During the period Hu traded with Lehman, he also pm-chased negotiable certificates of deposit (“NCDs”) issued by two Thai banks and underwritten by Lehman. Hu claims that he was never advised of the risks associated with these NCDs, and that he did not understand the nature of these investments. See Hu Aff. ¶ 90. He states that Lehman never informed him that it was the underwriter of the NCDs; nor did it inform him of the deteriorating value of these investments. Id. ¶¶ 93-94. Lehman eventually sent its personnel to China in June 1994 to explain these investments to Hu. Id. ¶¶ 95-96; R2. Ex. 110. Hu states that after he confessed his unauthorized trading to Cao in July 1994, Cao ordered him to liquidate the NCDs. Hu claims that soon afterwards, he prepared a letter for Cao to sign directing the immediate liquidation of the NCDs and the transfer of those proceeds to Non-Ferrous’ LME account. See Hu Aff. ¶¶ 115-16. This occurred before Lehman liquidated the FX and swap transactions. The Current Litigation In its Amended Complaint, Lehman asserts the following five claims against the Defendants: (1) Non-Ferrous breached its FX contract with LBCC; (2) Non-Ferrous breached its swap contract with LBSF; (3) Minmetals breached its guarantee of NonFerrous’ FX transactions; (4) Minmetals is liable for the FX transactions of its alter ego, Non-Ferrous; and (5) Minmetals is liable for the swap transactions of its alter ego, Non-Ferrous. The Defendants have asserted the following eighteen affirmative defenses against Lehman’s claims: (1) Lehman failed to state a claim upon which relief can be granted; (2) the transactions at issue were not authorized; (3) Lehman was negligent and breached its fiduciary duties; (4) Lehman inequitably failed to advise Non-Ferrous of the risks of the transactions at issue; (5) Lehman committed fraud and misrepresentations; (6) the transactions at issue were illegal; (7) Lehman’s claims are barred by the doctrine of unclean hands; (8) Lehman provided information that was incorrect and misleading; (9) Lehman breached the contracts at issue; (10) the contracts at issue lack consideration; (11) Lehman’s claims are barred by the doctrines of mutual or unilateral mistake; (12) the transactions were in violation of the Commodity Exchange Act, 7 U.S.C. § 1 et seq.; (13) Lehman’s claims are barred by the doctrines of es-toppel and equitable estoppel; (14) Lehman’s claims are barred by the doctrine of laches; (15) Lehman’s claims are barred by the doctrine of waiver; (16) Lehman failed to mitigate its damages; (17) this Court 'lacks personal jurisdiction over the Defendants; and (18) in essence, Lehman acted unfairly and deceitfully. Non-Ferrous has also asserted the following fourteen counterclaims against Lehman: (1) the transactions at issue were unauthorized; (2) Lehman breached its fiduciary duties; (3) Lehman aided, abetted, and induced a breach of fiduciary duty; (4) Lehman was negligent; (5) Lehman committed fraud; (6) Lehman committed negligent misrepresentations; (7) Lehman breached the contracts at issue; (8) the transactions were illegal; (9) the swap agreement contained additional terms understood by both parties; (10) Lehman committed willful deception, fraud, and cheating in violation of § 4b of the Commodity Exchange Act, 7 U.S.C. § 6b; (11) Lehman devised a scheme or artifice to defraud in violation of § 4o of the Commodity Exchange Act, 7 U.S.C. § 6o; (12) Lehman committed deception, cheating, and fraud in violation of § 32.9 of the Rules of the Commodity Futures Trading Commission, 17 C.F.R. § 32.9; (13) Lehman violated § 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5; and (14) Lehman committed conversion. After years of contentious discovery and pre-trial practice, the parties cross-moved for summary judgment as stated in the introductory paragraph of this .Opinion and Order. For the reasons that follow, the Defendants’ motion for summary judgment is denied with respect to Counts One, Two, Four, and Five of Lehman’s Amended Complaint. The Court reserves decision with respect to Count Three in accordance with the rulings in this Opinion and Order. Lehman’s motion for summary judgment is granted in part and denied in part. Summary judgment is granted with respect to the following affirmative defenses: the Fourth, the Seventh, the Ninth, the Tenth, the Thirteenth, the Fourteenth, the Fifteenth, the Seventeenth, and the Twentieth. Summary judgment is also granted with respect to Non-Ferrous’ Seventh and Twelfth Counterclaims. The Court reserves decision with respect to Non-Ferrous’ Fifth and Thirteenth Counterclaims in accordance with the rulings in this Opinion and Order. Summary judgment is denied with respect to all other affirmative defenses and counterclaims. DISCUSSION I. Summary Judgment Standards This Court may grant summary judgment only if the moving party is entitled to judgment as a matter of law because there is no genuine dispute as to any material fact. See, e.g., Silver v. City Univ. of New York, 947 F.2d 1021, 1022 (2d Cir.1991); Montana v. First Fed. Sav. & Loan Ass’n, 869 F.2d 100, 103 (2d Cir.1989); Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986); Falls Riverway Realty, Inc. v. Niagara Falls, 754 F.2d 49, 54 (2d Cir.1985). The role of the Court on such a motion “is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party.” Knight, 804 F.2d at 11; see also First Fed. Sav. & Loan Ass’n, 869 F.2d at 103 (stating that to resolve a summary judgment motion properly, a court must conclude that there are no genuine issues of material fact, and that all inferences must be drawn in favor of the non-moving party); Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir.1989) (same). The movant bears the initial burden of informing the Court of the basis for its motion and identifying those portions of the “pleadings, depositions, answers to interrogatories, and admissions to file, together with affidavits, if any,” that show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the movant meets this initial burden, the party opposing the motion must then demonstrate that there exists a genuine dispute as to the material facts. Id.; see also Silver, 947 F.2d at 1022; Greater Buffalo Press, Inc. v. Federal Reserve Bank, 866 F.2d 38, 42 (2d Cir.1989). The opposing party may not solely rely on its pleadings, on conclusory factual allegations, or on conjecture as to the facts that discovery might disclose. See, e.g., Gray v. Darien, 927 F.2d 69, 74 (2d Cir.1991). Rather, the opposing party must present specific evidence supporting its contention that there is a genuine material issue of fact. See, e.g., Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548; Twin Lab. Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir.1990); First Fed. Sav. & Loan Ass’n, 869 F.2d at 103; Knight, 804 F.2d at 12; L & L Started Pullets, Inc. v. Gourdine, 762 F.2d 1, 3-4 (2d Cir.1985). To show such a “genuine dispute,” the opposing party must come forward with enough evidence to allow a reasonable jury to return a verdict in its favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Cinema North Corp. v. Plaza at Latham Assocs., 867 F.2d 135, 138 (2d Cir.1989). If “the party opposing summary judgment propounds a reasonable conflicting interpretation of a material disputed fact,” then summary judgment must be denied. Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10 (2d Cir.1983) (citing New York State Energy Research & Dev. Auth. v. Nuclear Fuel Servs., Inc., 666 F.2d 787, 790 (2d Cir.1981)). The Court will analyze the parties’ cross-motions in accordance with these principles. II. The Defendants ’ Motion The Defendants move for summary judgment dismissing Lehman’s Amended Complaint in this case. Non-Ferrous also moves for summary judgment on its Eighth Counterclaim, which alleges that the transactions at issue were illegal. The Court will treat the Defendants’ motion under the following headings: (A) Choice of Law; (B) Illegality and Enforceability; (C) IMF Agreement; and (D) the Guarantee Claim. A Choice of Law Federal courts sitting in diversity in New York must apply New York’s choice-of-law rules when determining the law that governs a contract. See Dornberger v. Metropolitan Life Ins. Co., 961 F.Supp. 506, 530 (S.D.N.Y.1997). Although New York has traditionally followed common-law principles in its approach to contractual choice-of-law clauses, it now requires, by statute, that courts enforce the parties’ selection of New York law in commercial contracts of $250,000 or more. See N.Y. Gen. Oblig. Law § 5-1401. The power of courts to enforce that choice, however, remains restricted within constitutional bounds. In the Defendants’ bid to set aside the selection of New York law in NonFerrous’ agreement with Lehman, they have not apprised this Court of any such constitutional restriction in this case. This Court must therefore follow § 5-1401 and uphold the selection of New York law as the law governing the contract. Under traditional New York choice-of-law rules, courts looked to common-law principles to determine the law governing a contract, even for a contract containing a choice-of-law clause. See Haag v. Barnes, 9 N.Y.2d 554, 216 N.Y.S.2d 65, 175 N.E.2d 441 (1961) (applying a grouping-of-contracts test); A.S. Rampell, Inc. v. Hyster Co., 3 N.Y.2d 369, 165 N.Y.S.2d 475, 144 N.E.2d 371 (1957) (applying a reasonable-relation test). Common-law principles limit the effect of a choice-of-law clause where (1) there is no reasonable basis for the parties’ choice, or (2) the application of the chosen law would violate a fundamental public policy of another, more-interested jurisdiction. See Restatement (Second) Conflict of Laws § 187(2). In 1984, New York modified its common-law approach to choice-of-law clauses and embraced party autonomy by enacting General Obligation Law Section 5-1401 (“§ 5-1401”). See N.Y. Gen. Oblig. Law § 5-1401. By doing so, New York sought to secure and augment its reputation as a center of international commerce. See Edith Friedler, Party Autonomy Revisited: A Statutory Solution To a Choice-of-Law Problem, 37 Kan. L.Rev. 471, 497-98 (1989). Section 5-1401 states that for commercial contracts of at least $250,000, the parties’ selection of New York law in the contract is enforceable even if the transaction itself bears no reasonable relation to New York. See N.Y. Gen. Oblig. Law § 5-1401. Despite the apparently broad sweep of § 5-1401, the Defendants argue that the statute’s effect remains limited by the public-policy principle reported in § 187(2)(b) of the Restatement. The Defendants support this proposition by noting that although the legislative history to § 5-1401 expressly indicates an intent to modify other common-law conflicts principles, it does not similarly indicate any modification of the public-policy principle of Restatement § 187(2)(b). See Defendants’ Reply Mem. at 20 n. 26. This proposition that Restatement § 187(2)(b) limits the effect of § 5-1401 was flatly rejected in Supply & Building Co. v. Estee Lauder International, Inc. See No. 95 Civ. 8136, 2000 WL 223838 (S.D.N.Y. Feb.25, 2000) (applying New York law, as selected in the contract, rather than Kuwaiti law). In Supply & Building, Judge Casey stated that “Section 5-1401 is a broad choice of law provision clearly written to leave no doubt that New York substantive law applies when it is provided for in certain contracts.” Id. at *3. The court noted that § 5-1401 codifies New York’s “strong public policy interest” in enforcing parties’ contractual selections of New York law. Id. Therefore, because the statute clearly does not include an exception for violations of another jurisdiction’s public policy, the court rejected that proposed limitation. Id. This Court agrees that § 5-1401 is not limited by Restatement § 187(2)(b). Section 5-1401 is clear on its face, and thus there is no need to look beyond its own provisions to resolve any ambiguity in its meaning. What is not said on the floor of the Legislature cannot override the plain meaning of what is said in the statute, and therefore this Court concurs with Judge Casey’s holding in Supply & Building. Nevertheless, Section 5-1401 itself is not without its limits. Although the statute supersedes common-law conflicts principles, it must still remain within constitutional bounds. A court’s power to apply its own state’s law in a case that affects another U.S. state is limited by both due process and the Full Faith and Credit Clause. See Allstate Insurance Co. v. Hague, 449 U.S. 302, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981). However, the Supreme Court has indicated that the key inquiry ultimately is whether a court’s application of its own state’s law is arbitrary or fundamentally unfair. See Friedler, supra, at 499. Under this analysis, a court’s power to apply its own state’s law might be virtually unlimited when done pursuant to the parties’ own contractual choice. See id. at 499-500. It remains to be seen, however, whether a state with no connection to either the parties or the transactions could apply its own law, consonant with the Full Faith and Credit Clause, when doing so would violate an important public policy of a more-interested state. See id. at 501; Barry W. Rashkover, Note, Title II, New York Choice of Law Rule For Contractual Disputes: Avoiding the Unreasonable Results, 71 Cornell L.Rev. 227, 240 (1985). The constitutional limits are less clear, but perhaps more controversial, when a state applies its own law to transactions that affect foreign nations. See Friedler, supra, at 512; Christopher L. Ingrim, Choice-of-Law Clauses: Their Effect on Extraterritorial Analysis — A Scholar’s Dream, A Practitioner’s Nightmare, 28 Creighton L.Rev. 663 (1995). Commentators have surmised that the constitutional limits in those situations are derived from the concept of comity. See Friedler, supra, at 512. Comity, essentially, refers to the deference one nation shows to the laws of another nation, “having due regard both to international duty and convenience and to the rights of its own citizens or of other persons who are under the protections of its laws.” See Black’s Law Dictionary (6th ed.1990). The connection between comity and constitutional obligation is not clearly defined, since the comity concept itself lies somewhere in between an absolute international obligation and a mere courtesy. See Ingrim, supra, at 668 (discussing Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 40 L.Ed. 95 (1895)). The Defendants have not raised any constitutional restrictions upon this Court’s ability to enforce the parties’ selection of New York law in the contract, as required by § 5-1401. Moreover, no such restrictions are apparent under these circumstances. This is not a case involving parties or transactions without any connection to New York. Lehman is headquartered in New York and the transactions and payments occurred, at least in part, in New York. Instead, the Defendants stress China’s public-policy interest in regulating its foreign exchange. They explain, with the zeal of the newly-converted, the importance of China’s licensing requirements to protecting that interest. They therefore urge this Court to respect that policy and to set aside, pursuant to Restatement principles, the selection of New York law in Non-Ferrous’ agreement with Lehman. Although the public policy behind China’s licensing requirements is no doubt strong, § 5-1401 implicates other policies that are vitally important not only to contracting parties but also to New York and to the international community. The Supreme Court has signaled its support for choice-of-law clauses in international contracts because of their importance to international commerce. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 516, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). In enforcing an arbitration agreement in Scherk, the Court described choice-of-law and forum-selection clauses in international contracts as “almost indispensable preeondition[s] to achievement of the orderliness and predictability essential to any international business transaction.” Id. The Scherk Court’s emphasis on the need to ensure “orderliness and predictability” in international commerce has been echoed by the Ninth Circuit. See Northrop Corp. v. Triad Int’l Mktg., S.A., 811 F.2d 1265 (9th Cir.1987). In Northrop, a case analogous to this one, the plaintiff agreed to be the defendant’s exclusive marketer of military aircraft to Saudi Arabia’s air force in return for commissions on all sales. Id. Following a subsequent Saudi decree that prohibited the payment of commissions on arms sales, the defendant refused to pay the commissions it owed the plaintiff under the agreement. Id. at 1266-67. Although the parties in Northrop had originally selected California law in their contract, the defendant argued, pursuant to Restatement § 187(2)(b), that an application of California law would violate the Saudi public policy prohibiting commissions on arms sales. Id. at 1270. The court upheld the parties’ original selection of California law, holding that because of the interest stated in Scherk, choice-of-law clauses in international contracts “should be enforced absent strong reasons to set them aside.” Id. This Court need not choose from among these various interests, for the New York State Legislature has already done so by enacting § 5-1401. This Court, therefore, need only follow § 5-1401 and enforce the parties’ contractual selection of New York law, absent any constitutional restrictions on that enforcement. As previously noted, the Defendants have not apprised the Court of any such restrictions, nor are any such restrictions apparent in this case. As a result, this Court rules that acquiescence to the command of the New York State Legislature, and to the selection of the parties themselves, is proper in this case. B. Illegality and Enforceability The fact that New York law governs the parties’ contract does not necessarily mean that the contract is enforceable; New York law does not ignore an illegality in China. A contract that is illegal in its place of performance is unenforceable in New York if the parties entered into the contract with a view to violate the laws of that other jurisdiction. See Rutkin v. Reinfeld, 229 F.2d 248, 255-56 (2d Cir.1956); Dornberger v. Metropolitan Life Ins. Co., 961 F.Supp. 506, 533-35 (S.D.N.Y.1997); Hesslein v. Matzner, 19 N.Y.S.2d 462, 463-64 (N.Y.City Ct.1940). Therefore, even if Lehman’s contracts with Non-Ferrous could have been legally performed in New York, they are not enforceable under New York law if Lehman knew that they were illegal under Chinese law or was deliberately ignorant of that fact. See Rutkin, 229 F.2d at 255-56; Dornberger, 961 F.Supp. at 533-35; cf. Restatement (Second) Conflict of Laws § 202 cmt. c (reporting that the existence of illegality in a contract is usually determined by the law of the place of performance; the effect of that illegality is usually governed by the law determined under choice-of-law rules). The Defendants argue that Lehman entered into the FX and swap contracts with Non-Ferrous with a view to violate Chinese law. They state that Chinese law required that Non-Ferrous obtain a license from the SAEC before engaging in any FX and swap trading. Non-Ferrous had no such license. The Defendants also assert that Lehman knew fully that NonFerrous would require such a license before engaging in its transactions with Lehman. They argue that Lehman’s failure to make any effort to ensure that Non-Ferrous was licensed demonstrates that Lehman deliberately violated, or deliberately ignored, Chinese law. 1. Chinese Law The Defendants argue that under Chinese law during the relevant time period, 1992 to 1994, a State-owned enterprise such as Non-Ferrous needed a license from the State Administration of Exchange Control (“SAEC”) before engaging-in foreign exchange futures, spot, and option transactions. The Defendants argue that Non-Ferrous did not have such a license, and therefore the FX transactions entered into between LBCC and Non-Ferrous were illegal under Chinese law. They maintain that the swap transactions between LBSF and Non-Ferrous were illegal for the same reason. Lehman argues that although Chinese law did require a license for certain foreign exchange activity during the relevant time period, those regulations did not cover the foreign exchange and swap transactions at issue in this case. Therefore, because Non-Ferrous could legally enter into its transactions with LBCC and LBSF without SAEC licensing, those transactions were legal under Chinese law. An examination of applicable Chinese law during the 1992 to 1994 time period reveals extensive regulations governing FX and swap transactions. At that time, there were three laws that primarily governed transactions such as FX and interest-rate swaps: (1) the Provisional Regulations for Foreign Exchange Control of the People’s Republic of China, promulgated Dec. 18, 1980, effective Mar. 1, 1981 (the “1981 Law”); (2) the Detailed Implementing Regulations Governing Violation of Exchange Control of the People’s Republic of China, promulgated and effective Apr. 5, 1985 (the “1985 Law”); and (3) the Administrative Regulations on Spot and Forward Foreign Exchange Transactions by Financial Institutions on Behalf of Clients, promulgated and effective Mar. 5, 1988 (the “1988 Law”). The Court finds that these three laws formed a comprehensive regulatory scheme that governed the transactions at issue in this case. Under this regulatory scheme, a State-owned Chinese business entity such as Non-Ferrous would require a license from the SAEC to engage in FX future, spot, or option transactions, as well as interest-rate swap transactions. Because Non-Ferrous entered into these types of transactions without the proper governmental authorization, its agreements with LBCC and LBSF violated this Chinese regulatory scheme and were illegal under Chinese law. (a) The 1981 Law The 1981 Law governs FX and foreign-currency related transactions by Chinese entities. It imposes restrictions on, and requires prior state approval for, Chinese entities to engage in such transactions. The 1981 Law evidences a broad attempt by the State to control the vast majority of economic activity that involves foreign currency. See deLisle Reply Aff. Ex. 1 (quoting a 1981 statement by the Director of the SAEC: “China is a socialist nation, all unit revenues and expenditure in foreign exchange must be included in state planning in order to strengthen the State’s control over foreign exchange, [and] ensure the fulfillment of state economic plans.”). Article 1 of the 1981 Law states that the Law’s purpose was to strengthen “exchange control,” and to “expedite the national economic growth and safeguard the rights and interests of [China].” See deLi-sle Aff. Ex. A, art. 1. Article 2 defines foreign exchange as “[fjoreign currencies ... [s]ecurities payable in foreign currency ... [instruments payable in foreign currency ... [and o]ther foreign exchange funds.” Id. art. 2. The broad purpose of the 1981 Law and its expansive definitions suggest that all types of FX transactions and swap transactions are covered. Both the FX transactions and the interest-rate swap transactions Hu entered into seemingly fall under the category of “instruments payable in foreign currency,” or at least under the catch-all category of “other exchange funds.” The 1981 Law provides that Chinese enterprises, operating either inside or outside of China, may only possess or use foreign exchange in accordance with plans approved by the State. Id. arts. 5-8, 11. The 1981 Law also gives the SAEC broad regulatory powers and discretion by naming it the “administrative organ in charge of exchange control,” and declaring that “detailed provisions for the enforcement of these provisions shall be formulated by” the SAEC. Id. arts. 3, 31; see deLisle Reply Aff. ¶ 10. Such powers and discretion include the authority to implement and interpret the 1981 Law. See deLisle Reply Aff. ¶ 10. (b) The 1985 Law The SAEC issued the 1985 Law pursuant to its authority under Articles 31 and 33 of the 1981 Law. See deLisle Aff. Ex. M, art. 1. In fact, the 1985 Law provides the “detailed provisions for the enforcement” of the 1981 Law called for in Article 33 of the 1981 Law. See id. Ex. A, art. 33, Ex. M, art. 1. Article 6 of the 1985 Law states that “[e]ngaging in foreign exchange operations without prior SAEC approval” is illegal because such activity “disrupts] financial stability.” Id. art. 6(1). Article 7 lists various punishments for Chinese entities that engage in such illegal activity. See id. art. 7. Article 6(1) of the 1985 Law appears to cover the types of FX and swap trades that Lehman and Non-Ferrous entered into through Hu. This view is shared not only by the Defendants’ expert, but also by a high-ranking official of the SAEC. See deLisle Réply Aff. ¶ 12; Mangang Aff. § 1, at 1-2 (stating that a Chinese entity needed a license from the SAEC to engage lawfully in FX spot, forward, and option transactions, as well as interest-rate swap transactions, from 1992 to 1994). Under this law, Non-Ferrous needed prior SAEC approval for the transactions at issue in order for those transactions to be legal. Unlike Lehman, this Court finds nothing in the 1985 Law that suggests that its provisions are limited to the “trading of physical foreign exchange inside of China.” See Feinerman Aff. ¶ 37. The provisions of the 1985 Law do not limit the law’s application to activities inside of China— indeed, many of its provisions regulate activity outside of China. See, e.g., deLisle Aff. Ex. M, arts. 2(3), 4(1), 4(2), 6(2). Lehman’s narrow reading of the 1985 Law seems even less likely given the broad scope of the 1981 Law that the 1985 Law was enforcing. (c) The 1988 Law The 1988 Law further demonstrates that Chinese law regulated FX forward and spot transactions and required specific governmental approval for Chinese entities to engage in such transactions. The 1988 Law was enacted to relax restrictions on forward and spot transactions. At that time, Chinese enterprises engaged in international business were losing money due to the fluctuations in certain foreign currencies. See deLisle Reply Aff. Ex. 7. As a result, the SAEC enacted the 1988 Law to allow certain authorized financial institutions to execute forward and spot trades for Chinese enterprises that had been hurt by the fluctuations in foreign currencies. Id. The 1988 Law expressly states that it was “formulated to hedge against exchange risks.” See deLisle Aff. Ex. G, art. 1. Although the 1988 Law focusses primarily on the requirements for brokers or other agents, it is relevant to the instant inquiry. The 1988 Law reinforces the requirements laid down in the 1981 Law and the 1985 Law for Chinese entities that wish to engage in transactions involving foreign currencies. Under the 1988 Law, there are two ways a Chinese entity can lawfully engage in FX forward and spot transactions. According to Article 2, a “financial institution” wishing to engage in such activity must obtain SAEC approval. Id. art. 2. If approval is not obtained, then the 1988 Law requires that a Chinese entity obtain prior SAEC approval of any FX forward or spot transaction by submitting an application and a copy of the proposed trade to the local SAEC branch. Id. art. 8. Once the trade is approved by the SAEC, the entity must then engage a state-authorized agent to execute the trade. Id. The 1988 Law therefore demonstrates that without approval from the SAEC, Hu’s FX forward and spot transactions were illegal. (d) The 199U Notices Notwithstanding these three laws, Lehman argues that two notices issued by the Chinese government in 1994 (the “1994 Notices”) were the first regulations that governed the types of transactions at issue in this case. Lehman claims that before these notices, no applicable law proscribed Non-Ferrous’ ability to engage in its transactions with LBCC and LBSF. Therefore, because these notices came into effect after the relevant time period, Lehman argues that Non-Ferrous’ trading was legal. These 1994 Notices, however, appear to have been mere announcements that the Chinese government was going to begin strictly enforcing already existing laws that governed, inter alia, the trading of derivative financial products such as FX and interest-rate swap transactions, namely, the 1981 Law, the 1985 Law, and the 1988 Law. The first notice, the “State Council Notice,” lists a host of problems in China’s futures market and states that the Chinese government needs to “crack down on all forms of illegal futures trading activities.” See Feinerman Aff. Ex. B. The rest of the State Council Notice provides suggested methods to implement this “crackdown.” The second notice, the “Joint Notice,” is more on point for the instant case. The Joint Notice states that Chinese business entities “have engaged in foreign exchange futures trading and foreign exchange margin trading without approval from [the required authorities].” Id. Ex. C. It then notes that “[t]hese kinds of illegal trading activities” have caused “a large number of economic disputes.” Id. The Joint Notice stresses that “[unauthorized foreign exchange futures trading or foreign exchange margin trading ... is illegal,” and that under the 1985 Law, “to organize or participate in these kinds of trading ... constitutes an act of disruption of the financial order.” Id. From the text of the 1994 Notices, it appears that the conduct in question was already illegal, so far as the Chinese government was concerned. The 1994 Notices were sent out to express the government’s desire to enforce the provisions of the 1985 Law, among other already-existing laws. The 1994 Notices do not appear to have changed Chinese law, contrary to Lehman’s assertion. Indeed, the Joint Notice states that certain of the types of transactions entered into by Hu were illegal under the 1985 Law. Non-Ferrous did not have an SAEC license to engage in FX or swap trading. See Mangang Aff. ¶ 2. Therefore, this Court finds that under the regulatory scheme established by the 1981 Law, the 1985 Law, and the 1988 Law, the transactions entered into by Non-Ferrous and Lehman were illegal in China during the relevant time period. 2. Lehman’s Intent To Violate Chinese Law Although Lehman’s agreements with Non-Ferrous were illegal in China, the Court finds that there is a question of fact concerning whether Lehman entered those agreements with “a view to violate” Chinese law. Lehman has argued that Chinese law did not require a license for the relevant transactions at that time. Yet, it appears that Lehman, or at least the individuals at Lehman who were involved with Non-Ferrous’ FX and swap trading, believed at the time that a license was indeed required for those transactions. Lehman states, however, that it believed that Hu and Non-Ferrous were acting in compliance with Chinese law. Hu and Non-Ferrous formally and informally represented to Lehman that they were permitted to trade in FX. Lehman reports that it openly conducted a seminar on foreign-currency options trading together with Hu and SAEC representatives, which further caused it to believe that Hu was in compliance with the SAEC. Moreover, Gan Choo Yeao, a Lehman foreign currency salesperson, recalls vaguely that Hu showed him an SAEC authorization for FX trading. See P2. Ex. 1 at 38-39. Nevertheless, Lehman failed to ensure Non-Ferrous’ compliance by obtaining a copy of its SAEC license, as required in the ISDA Master Agreement. A series of Lehman employees connected to the transactions state that they each believed that someone else was responsible for obtaining the required copy of that license. The Defendants dismiss this as “a remarkable display of finger pointing.” See Defendants’ Mem. in Supp. at 15. This Court, however, is not in a position on summary judgment to weigh the credibility of Lehman’s assertions. That is for the ultimate fact finder, not the judge on a summary judgment motion. Viewing the evidence in the light most favorable to Lehman, this Court finds that whether Lehman entered the agreements with a view to violate Chinese law is an issue of fact for trial. C. IMF Agreement The Defendants raise the issue of China’s membership in the International Monetary Fund as further grounds for declaring that Non-Ferrous’ agreements with Lehman are unenforceable. Article VIII § 2(b) of the Articles of Agreement of the International- Monetary Fund (“IMF Agreement”) states that a member nation may not enforce an exchange contract that violates valid exchange-control regulations of any other member. See IMF Agreement, supra, Art. VIII § 2(b). Because Non-Ferrous’ unlicensed transactions with Lehman violated Chinese exchange-control regulations, the Defendan