Extra “duty of care” when holding client money
In a recent decision, the High Court has found a Stockbroker guilty of negligence for paying out over $200m from its client account on the instruction of only one of its client’s directors (who incidentally was also the client company’s sole shareholder).
The High Court found that the Stockbroker was guilty of breaching its duty of care to the client company, as various signs existed that ought to have alerted the Stockbroker to the fact that the director was a rogue and may not have been acting “bona fide” on behalf of the client company.
Case ref: Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd  EWHC 257 (Ch)
Matthew Howat, Commercial & Dispute Partner, comments: “Whilst the facts of this case are very specific and may not apply to everyday banking situations, the repeated references to “banks” in the Judge’s Judgment does serve as a warning to any institution holding client money to be extra vigilant. Client instructions must be independently considered before they are acted upon and, where unsure, should be questioned to ensure they represent the will of the client company as a whole”.
Howat Avraam Solicitors provide Commercial, Employment and Contract Dispute advice to companies and business owners. As business owners ourselves, we have a pragmatic in-house approach to resolving issues before they arise by working alongside our clients, often on monthly retainers. We are commercial, practical and entrepreneurial in our approach to legal services.
To discuss any commercial or legal matter on a no obligation basis, please contact Matthew Howat, Company and Disputes Partner, on 020 7884 9700 or email Matthew at Matthew.Howat@hasolicitors.co.uk. Alternatively, visit our website at www.howatavraamsolicitors.co.uk.
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