CMC SPREADBET PLC v ROBERT TCHENGUIZ

CMC SPREADBET PLC v ROBERT TCHENGUIZ

CMC complied with regulatory requirements for client categorisation and warnings, and acted rationally and fairly in closing out Mr Tchenguiz’s account; no breach of Braganza duty or COBS 2.1.1R occurred. The Defendant was properly categorised as an elective professional client, lost negative balance protection, and is liable for the debt claimed.

Parties
Claimant: CMC Spreadbet PLC; Defendant: Robert Tchenguiz
Jurisdiction
England and Wales
Judgment Date
01 July 2022
Procedural Posture
Commercial Claim / Final Judgment
Outcome
Claim allowed
Legal Topics
Client Categorisation, Spread Betting, Negative Balance Protection, Margin Call, Regulatory Compliance, Contractual Discretion, Braganza Duty, Best Interests Rule
Financial Regulation Contract Law Client Categorisation Spread Betting Negative Balance Protection Margin Call Regulatory Compliance Contractual Discretion +2 more

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Parties

CMC Spreadbet PLC

Claimant

Robert Tchenguiz

Defendant

Procedural Posture

Commercial Claim / Final Judgment

Legal Issues

  1. 1 Whether CMC complied with FCA Conduct of Business Sourcebook (COBS) rules in categorising Mr Tchenguiz as an elective professional client
  2. 2 Whether CMC gave adequate warnings regarding loss of retail protections, including negative balance protection
  3. 3 Whether CMC breached the Braganza duty or COBS 2.1.1R in closing out Mr Tchenguiz’s account

Ratio Decidendi

CMC complied with regulatory requirements for client categorisation and warnings, and acted rationally and fairly in closing out Mr Tchenguiz’s account; no breach of Braganza duty or COBS 2.1.1R occurred. The Defendant was properly categorised as an elective professional client, lost negative balance protection, and is liable for the debt claimed.

Court Disposition

Claim allowed

Orders

  • Defendant to pay £1.31 million to Claimant together with interest
  • Costs as per agreed draft order