Anderson & Ors v Sense Network Ltd

Anderson & Ors v Sense Network Ltd

Sense Network Limited is not liable for the claimants’ losses because the fraudulent scheme operated by MFSS was outside the scope of business for which Sense accepted responsibility under FSMA s.39 and the AR agreement; the scheme, though a CIS, was not authorised or permitted by Sense, and there was no actual or apparent authority for MFSS to advise on or operate the scheme. Sense’s supervisory systems and monitoring were reasonable and in line with regulatory standards; knowledge of Mr. Ingram was not attributable to Sense for the purposes of breach. Even if there were breaches, causation was not established as the scheme would likely have continued regardless. No reduction for...

Parties
Claimants: Adam Anderson and others; Defendant: Sense Network Limited
Jurisdiction
England and Wales
Judgment Date
26 October 2018
Procedural Posture
Civil Commercial Court Judgment / Final Judgment After Full Trial
Outcome
Claims dismissed. Judgment for the defendant.
Legal Topics
Vicarious Liability, Breach of Supervisory Duty, Apparent Authority, Actual Authority, Collective Investment Scheme, FSMA Section 39, Contributory Negligence, Mis Selling, Compliance and Monitoring, Attribution of Knowledge
Financial Services Law Tort Law Contract Law Regulatory Law Vicarious Liability Breach of Supervisory Duty Apparent Authority Actual Authority +6 more

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Parties

Adam Anderson and others

Claimants

Sense Network Limited

Defendant

Procedural Posture

Civil Commercial Court Judgment / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether Sense Network Limited is liable for losses suffered by claimants as a result of a fraudulent Ponzi scheme operated by MFSS under various legal routes including FSMA s.39, actual/apparent authority, breach of supervisory duty, vicarious liability, and inadequate monitoring/investigation.
  2. 2 Whether the scheme constituted a Collective Investment Scheme under FSMA s.235.
  3. 3 Whether Sense breached its supervisory obligations under the FCA Handbook SUP 12.

Ratio Decidendi

Sense Network Limited is not liable for the claimants’ losses because the fraudulent scheme operated by MFSS was outside the scope of business for which Sense accepted responsibility under FSMA s.39 and the AR agreement; the scheme, though a CIS, was not authorised or permitted by Sense, and there was no actual or apparent authority for MFSS to advise on or operate the scheme. Sense’s supervisory systems and monitoring were reasonable and in line with regulatory standards; knowledge of Mr. Ingram was not attributable to Sense for the purposes of breach. Even if there were breaches, causation was not established as the scheme would likely have continued regardless. No reduction for...

Court Disposition

Claims dismissed. Judgment for the defendant.