Commercial Dispute Resolution Briefing, October 2009 (Part 2)

FRAUD

Claim for lost trading profits upheld following broker's fraud

Parabola Investments Limited and others v Browallia Cal Limited and others (2009)

In a notably generous decision of the High Court, claimant traders successfully recouped the entirety of their losses on their investments in circumstances where their broker had made daily dishonest representations that the trading he was conducting on their behalf was profitable. The Court decided that the broker ought to make good the claimant traders' losses and even awarded them damages for the profits they would probably have made on alternative investments.

The claimants were run by Rajesh Gill, an extremely successful trader in derivatives on the world markets. The first and second defendants were financial institutions which Mr Gill had traded through and which had employed Matthew Bomford, the third defendant, a senior futures broker. The claimant alleged that over some eight months, Mr Bomford had,