Sevilleja (Respondent) -v- Marex Financial Ltd (Appellant) – 2020 UKSC 31

Introduction

Samantha Gilbert speaks to compliance leaders from the healthcare, financial services, insurance, IT and commercial sectors on what to expect from the new “business as usual” and enforcement. Conduct reviews, increased regulatory scrutiny and long-term digitisation are some key issues for compliance teams to prepare for.

Lexology Pro Compliancetakes a look at some of the most informative articles published on Lexology this fortnight for compliance teams to stay up-to-date, including key guidance from regulators around the world and practical tips to help businesses adapt to a new normal.

Speed read: Rachel Clark considers whether draft new regulations requiring scrutiny of pre-pack sales to connected parties will be enough to prevent fraud and restore confidence in the process.

Once likened to sustaining ‘Frankenstein monsters’, the use of ‘pre-packs’ is controversial.

Whilst not defined by statute, the term ‘pre-pack’ is commonly used to mean an arrangement to sell all or a substantial part of a business prior to the company entering administration, with the administrator then completing the sale.

Mariela Ines Melhem, Esteban Valansi and Siro Pablo Astolfi, Mitrani Caballero & Ruiz Moreno Abogados

This is an extract from the third edition of The Guide to Corporate Crisis Management published by Latin Lawyer. The whole publication is available here.

If in your position as director you allow your company to operate while insolvent and unable to pay debts, you could be liable to serious penalties.

The Australian Securities and Investments Commission (ASIC) outlines key considerations for directors whose companies are in financial difficulty or are insolvent.

Am I a director?

A creditor has a chance to obtain satisfaction through a fraudulent transfer claim even if the debtor disposed of its assets before the claim arose. The intention to injure future creditors is demonstrated by the foreseeability of insolvency, and thus the debtor’s expectation of becoming insolvent with respect to potential creditors.

When company directors breach the law they can be personally liable for the company’s debts and regulatory action can be taken against them.

In Australia, the agency responsible for enforcing such breaches is the Australian Securities and Investments Commission (ASIC).

ASIC outlines the key liabilities company directors need to be aware of when things go wrong.

Speed read: The wrongful trading suspension ended on 30 September 2020 and it is important that company directors keep in mind the offence in section 214 of the Insolvency Act 1986. Although it is a civil contravention, there could be implications for the anti-money laundering regime.

The English Court has, for the first time, handed down judgment on whether the liquidation stay prevents the Financial Conduct Authority (the "FCA") from issuing a Warning Notice under sections 92 and 126 of the Financial Services and Markets Act 2000 ("FSMA") without first seeking leave from the Court.