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Failure to prevent fraud: making up for failure to prosecute?
The UK government has introduced a suite of amendments to the Economic Crime and Corporate Transparency Bill (ECCTB) which, if adopted, would add a new offence of “failure to prevent fraud” by large legal entities to the UK statute book. Corporate crime specialists Richard Lissack KC and Robin Lööf of Fountain Court Chambers analyse the proposed new offence, its background and context, main features and policy justification. Using the experience of over a decade of the existing failure to prevent bribery regime, they then consider the likely impact of the new failure to prevent fraud offence on business.
19 March 2024“Credit bidding” unsecured debt in an administration
In the recent case of Re Sova Capital Limited (in special administration) [2023] EWHC 452 (Ch), the English High Court approved a structure which was, in substance, a “credit bid” by an unsecured creditor. In this article, the authors explore the High Court’s reasoning and highlight key points to be considered by insolvency officeholders looking to replicate this structure as a means of asset realisation.
19 March 2024Dojima rice and digital assets: new tech, old problems? Market manipulation by cryptocurrency exchanges
This article looks at market manipulation by cryptocurrency exchanges. It explores the features of cryptocurrencies and whether or not existing legal frameworks are capable of accommodating a claim or criminal charge for market manipulation. In particular, the article explores the approach in the US where a claim has recently been brought by the US Department of Justice and the Securities Exchange Commission for market manipulation against a former employee of a cryptocurrency exchange.
19 March 2024Client categorisation under the FCA’s Conduct of Business Rules: what are the possible consequences of getting it wrong?
In this article, Robert Purves considers the statutory rights of action available to a client where a firm incorrectly categorises it and how a breach of client categorisation requirements may be deployed to resist a claim.
19 March 2024The new FCA Consumer Duty: the interrelationship with the Senior Managers and Certification Regime
2023 sees the introduction of what the Financial Conduct Authority (FCA) hopes will be a significant increase in the standard of consumer customer care: the new Consumer Duty (the Duty) will apply to firms from 31 July 2023 in respect of new products and services and of existing products and services that remain on sale or open for renewal (it will be another year before the Duty will apply to closed products and services). This in turn brings changes to, and greater responsibilities under, the existing Senior Management and Certification Regime (SM&CR), which are considered in this article.
19 March 2024US distressed debt techniques and minority protection in English law
The “drop-down” and “up-tier” restructuring techniques have become more frequently used by businesses with New York governed credit documentation facing financial difficulties. These techniques have been contentious; many transactions have resulted in litigation in US courts by the minority lenders. This article considers, if such techniques were used in relation to English governed credit structures, how English law principles of minority protection could come into play.
19 March 2024Hedging and lending: a practical guide
In this article the authors provide an overview of the relevant legal and documentation issues arising from the hedging and lending relationship in commercial lending.
19 March 2024Interpreting ICC standardised rules in trade finance disputes: courts take an international perspective
Banking practice in areas of trade finance such as demand guarantees and letters of credit is standardised by a collection of contractual rules published by the International Chamber of Commerce (ICC). The application of domestic contractual interpretation principles may risk inconsistency in the way such rules are construed between jurisdictions. However, in relation to the most commonly used rules (the UCP 600, which apply to letters of credit), several courts (including the English courts) have tried to ensure that the rules are interpreted consistently with reference to their international consequences, as opposed to strictly in accordance with the governing law of the contract. Two decisions of the English High Court and the Qatari Appellate Court demonstrate a trend towards construing other sets of ICC standardised rules in the same way as the UCP 600.
19 March 2024Are sole director companies all acting unlawfully?
The question of sole director companies has been thrown into some doubt by Idrees Hashmi v Paul Lorimer-Wing [2022] EWHC 191 (Ch), also known as Re Fore Fitness Investments Holdings Limited. If it is correctly decided, and sadly no appeal seems pending, then it could have very serious consequences for sole director companies – at least for anyone using the Model Articles set out in the Companies (Model Articles) Regulations 2008/3229 (Model Articles).
19 March 2024The spectre of Spectrum: after Avanti and the sliding scale of floating to fixed charges
That case raises interesting practical questions on drafting within existing debentures and especially when considering the increasing prevalence of New York-law governed covenant packages in sponsor-friendly facility agreements and other debt documents. Those documents often include restrictions on the borrower’s ability to dispose of its assets. More importantly, they include exemptions to those restrictions where automatic release of the collateral is granted under the terms of the documents. How far can those exemptions go before a fixed charge is re-characterised? Avanti has clarified that horizon between fixed and floating charges, possibly moving where many commentators thought it had been. It renews the relevance of that horizon for charges in practice . The consequence is that some charges once thought floating are in fact fixed.
19 March 2024
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