BNP Paribas SA, France’s largest bank, must pay a client $16.6 million over a dispute related to one of the bank’s hedge-fund products.

The firm’s securities unit is required to give Ontonimo Ltd. $16.1 million in compensatory damages and $500,000 in legal fees, according to a June 26 arbitration decision on the Financial Industry Regulatory Authority’s website Tuesday. Ontonimo was incorporated to invest the personal assets of BNP Paribas retail clients Margaret and James Eringer, who live in London, said their attorney, Barry R. Lax.

BNP Paribas recommended and sold the Eringers a speculative and highly leveraged derivative product and required James Eringer to serve as an investment adviser of Ontonimo even though he had no professional experience managing money, Lax said in a phone interview. Ontonimo was created because the Paris-based bank wasn’t permitted to sell the derivative product directly to retail clients, he said.

BNP Paribas was accused of breaching fiduciary, contractual and legal duties, as well as gross negligence and negligent supervision, according to the ruling. Margaret Eringer lost $13 million on the investment, or about half her net worth, according to a 2010 complaint.

Nancy Condon, a Finra spokeswoman, declined to comment on the award. Cesaltine Gregorio, a spokeswoman for BNP in New York, said the bank disagreed with the decision and was “deeply disappointed” with the outcome.

BNP Paribas “takes its responsibilities to its clients seriously and believes that it conducted itself professionally and appropriately with respect to Ontonimo and its investments,” she said in an e-mailed statement.