FMLC has published an addendum to its March 2012 paper on legal uncertainties arising from bail-ins. The addendum addresses the points the Commission made in a recent paper. (Source: FMLC Bail-in Addendum)

FSA has made a statement explaining how the bank’s failure to comply with FSA’s liquidity guidelines as they applied to it was critical. It says that while the bank’s downfall was not directly due to the breaches, the breaches happened at a critical period for the financial markets and at a time FSA needed banks to keep it up to date on their liquidity. (Source: FSA Explains Liquidity Importance)

In Blight v Brewster [2012] EWHC 165 (Ch) the High Court allowed a creditor to enforce his judgment debt against a debtor's pension funds. The court followed a 2011 Privy Council case (Tasarruf Mevduati Sinorta Fonu v Merrill Lynch Bank and Trust Company & ors) in holding that it had jurisdiction to do so under section 37 of the Senior Courts Act 1981. Section 37 provides that the court may appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.

In its recent decision in Lehman Brothers International (Europe) (in administration)¹  the Supreme Court resolves the uncertainty where a regulated firm does not properly segregate client monies. The decision has a number of practical implications, not only for the administration of Lehman Brothers International (Europe) (LBIE) but also for the way client monies are held by institutions.  

Background

London - On 29 February 2012, the UK Supreme Court handed down judgment in the much publicised ‘Lehman client money’ case1, ruling in favour of those clients of Lehman Brothers International (Europe) (“LBIE”) whose money ought to have been, but never was, segregated from other assets held by LBIE.

Introduction

WorldSpreads Limited has become the third firm to enter into the Special Administration Regime. The firm, a spread betting company, entered into the regime following the discovery of accounting irregularities which led to a finding that the firm could not continue in business. (Source: Firm Enters Special Administration)

The Supreme Court yesterday ruled that client money held in un-segregated accounts should be treated the same as client money held in segregated accounts, enabling un-segregated account holders to share in the client money pool on the insolvency of a firm with whom the account is held.

The Supreme Court handed down its judgment in relation to the client money application in the matter of Lehman Brothers International (Europe) (LBIE). The judgment has a number of implications for firms who hold client money, and for firms who hold money with banks and other firms as clients themselves. The complicated and controversial nature of the appeal is reflected in the sharply opposing opinions of the Lords in relation to two of the three issues considered.

The courts and FOS are now headed down very different paths in their approach to credit crunch losses suffered by clients of regulated firms. While FOS has all but abandoned the general law of causation in its approach to cases of consumer detriment, we have observed how the courts have held again and again that the general law of causation applies to mis-selling claims.