CMC Spreadbet Plc v Tchenguiz [2022] EWHC 1640 (Comm) (01 July 2022)

CMC Spreadbet Plc v Tchenguiz [2022] EWHC 1640 (Comm) (01 July 2022)

CMC complied with the relevant COBS rules in categorising Mr Tchenguiz as an elective professional client. The required warnings, including those regarding the loss of negative balance protection, were provided in the documentation and correspondence. Mr Tchenguiz, an experienced investor, acknowledged understanding the risks and protections lost. No breach of the best interests rule or irrational exercise of discretion was established. The debt is due and payable.

Citation
[2022] EWHC 1640 (Comm)
Parties
Claimant: CMC Spreadbet Plc; Defendant: Robert Tchenguiz
Jurisdiction
England and Wales
Judgment Date
01 July 2022
Procedural Posture
Commercial Claim (debt/contract) / High Court Trial Judgment
Outcome
Claim allowed
Legal Topics
Client Categorisation Under FCA Rules, Negative Balance Protection, Spread Betting Liability, Breach of Statutory Duty (fsma S.138 D), Best Interests Rule (cobs 2.1.1 R)
Financial Services Regulation Contract Law Client Categorisation Under FCA Rules Negative Balance Protection Spread Betting Liability Breach of Statutory Duty (fsma S.138 D) Best Interests Rule (cobs 2.1.1 R)

Case Brief

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Parties

CMC Spreadbet Plc

Claimant

Robert Tchenguiz

Defendant

Procedural Posture

Commercial Claim (debt/contract) / High Court Trial Judgment

Legal Issues

  1. 1 Whether CMC complied with FCA COBS rules in categorising Mr Tchenguiz as an elective professional client
  2. 2 Whether sufficient warnings were given regarding loss of protections, including negative balance protection
  3. 3 Whether CMC breached the best interests rule or exercised its discretion irrationally in closing out the account

Ratio Decidendi

CMC complied with the relevant COBS rules in categorising Mr Tchenguiz as an elective professional client. The required warnings, including those regarding the loss of negative balance protection, were provided in the documentation and correspondence. Mr Tchenguiz, an experienced investor, acknowledged understanding the risks and protections lost. No breach of the best interests rule or irrational exercise of discretion was established. The debt is due and payable.

Court Disposition

Claim allowed

Orders

  • Judgment for the claimant for £1.31 million plus interest and costs