The Financial Conduct Authority (FCA) v Anderson & Ors [2014] EWHC 3630 (Ch) (05 November 2014)

The Financial Conduct Authority (FCA) v Anderson & Ors [2014] EWHC 3630 (Ch) (05 November 2014)

Distribution should be made to depositors who suffered actual capital losses, with sums allocated to depositors of each Defendant's scheme, not pooled, due to the personal guarantees and absence of practical difficulty in maintaining scheme separation. Claims should be scaled down pro rata if recoveries are insufficient, and liberty to apply is granted for unresolved issues or errors.

Citation
[2014] EWHC 3630 (Ch)
Parties
Claimant: The Financial Conduct Authority; Defendant: John Cecil Anderson; Defendant: Kenneth Alan Peacock; Defendant: Kautilya Nandan Pruthi; Interested Party: Peter Lloyd; Trustee: Trustee in Bankruptcy of the Defendants
Jurisdiction
England and Wales
Judgment Date
05 November 2014
Procedural Posture
Application Under Section 382 Financial Services and Markets Act 2000 / Directions for Distribution of Sums to Depositors
Outcome
Directions granted for distribution of sums to depositors as per FCA's proposed scheme, with liberty to apply.
Legal Topics
Ponzi Schemes, Distribution of Restitution, Bankruptcy Trustee Duties, Qualifying Persons Under FSMA
Financial Regulation Insolvency Restitution Ponzi Schemes Distribution of Restitution Bankruptcy Trustee Duties Qualifying Persons Under FSMA

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Parties

The Financial Conduct Authority

Claimant

John Cecil Anderson

Defendant

Kenneth Alan Peacock

Defendant

Kautilya Nandan Pruthi

Defendant

Peter Lloyd

Interested Party

Trustee in Bankruptcy of the Defendants

Trustee

Procedural Posture

Application Under Section 382 Financial Services and Markets Act 2000 / Directions for Distribution of Sums to Depositors

Legal Issues

  1. 1 Basis for court directions under section 382 FSMA for distribution of restitution sums
  2. 2 Definition and identification of qualifying persons
  3. 3 Fairness of distribution method among depositors

Ratio Decidendi

Distribution should be made to depositors who suffered actual capital losses, with sums allocated to depositors of each Defendant's scheme, not pooled, due to the personal guarantees and absence of practical difficulty in maintaining scheme separation. Claims should be scaled down pro rata if recoveries are insufficient, and liberty to apply is granted for unresolved issues or errors.

Court Disposition

Directions granted for distribution of sums to depositors as per FCA's proposed scheme, with liberty to apply.

Orders

  • Distribution to depositors of each Defendant's scheme based on capital losses less interest received.
  • Claims scaled down pro rata if recoveries are insufficient.