The Securities and Investments Board v Scandex Capital Management A/S & Jeremy Bartholomew‐White

Publication Date01 April 1997
AuthorJ Carnwath,Joanna Gray
SubjectAccounting & finance
Journal of Financial Regulation and Compliance Volume 5 Number 4
SIB court action against forex trader
The Securities and Investments Board v
Scandex Capital Management A/S & Jeremy
High Court: Chancery Division: Carnwath J
Judgment Date: 26th March, 1997
The first Defendant, Scandex Capital Man-
agement A/S, (Scandex) was a Danish
company, now in liquidation, of which the
second Defendant, Mr Bartholomew-
White was managing director and in
which he held one third of the share capi-
Scandex was incorporated in Septem-
ber 1995 and submitted an application for
authorisation to do investment business to
Finans (the Danish investment business reg-
ulatory authority) in late December 1995.
There was some confusion as to the exact
date that Scandex commenced doing
investment business but it was clear that by
April 1996 it was: sending letters to indivi-
dual investors in the UK, offering invest-
ment services involving foreign exchange
trading for and on behalf of UK investors;
had sent mailshots directed at investors into
the UK; had made unsolicited calls offering
forex trading services; and, had also made
misleading statements about, inter alia, the
level of commission Scandex was charging
its clients. Significant losses were incurred
by UK investors as a result of their dealings
with Scandex. Scandex had been operating
in Denmark on the basis of interim author-
isation from Finans under transitional pro-
visions of Danish law implementing the
Investment Services Directive (93/22/EEC,
hereinafter referred to as ISD), pending
Finans' determination of its application for
full authorisation to do investment busi-
When, in late April 1996, SIB
enquired on what basis Scandex was cold-
calling and advertising speculative forex
dealing services in the UK, Scandex replied
that it was doing so under the passporting
provisions of the ISD since it was
authorised in Denmark and therefore
entitled to offer cross-border investment
services. In the event, Scandex' Danish
authorisation under the transitional provi-
sions of Danish law came to an end in Sep-
tember 1996 when Finans considered and
rejected its application for authorisation.
The Danish regulator was concerned about
the contents of an audit report it had asked
for on Scandex, which prompted the resig-
nation of Scandex' two Danish directors,
and also the fact that there was no evidence
to show that Scandex had traded in Den-
mark as opposed to using its office as a
launch pad for approaching clients based
outside Denmark.
The Securities and Investment Board (SIB)
issued a writ on 10th October, 1996
whereby it sought declarations that both
Scandex and Mr Bartholomew-White
Journal of Financial Regulation
and Compliance, Vol. 5, No. 4,
© Henry Stewart Publications,
Page 361

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