BL-2020-001417 - [2025] EWHC 2487 (Ch)

The case of Musst is that even if the part of the business which made the introductions to the Observatory and LGT was MMM, the evidence is that that business was transferred to LGBR or some other entity in late 2012.

The evidence relied upon is that LGBR, a new entity was incorporated on 26 October 2012. On 23 November 2012, LGBR by Mr Reeves caused to be circulated to 100-200 customers an invitation to a drinks’ party. This was more than an invitation to drinks, but was notice of the commencement of a new business. The invitation said the following:

“I am pleased to say we have completed our buyout of the distribution and fund management business of Matrix Asset Management, including the Ascension Fund and funds of hedge funds.

A new distribution company, LGBR Capital LLP, is now established and operational. We're having some very informal launch drinks on Thursday 6 December at the Gable Bar, Moorgate and it would be great if you can join us. In the meantime, please see my new contact details and further information on our new venture below.

LGBR Capital LLP

Our new distribution company, LGBR Capital LLP, is now established and operational. We also are proud to announce that First Trust Advisors (“FT”), a US asset manager with circa $65bn AUM, will imminently become a shareholder of LGBR Capital. We operate within FT's regulation as an appointed representative of their UK subsidiary (First Trust Global Portfolios Ltd). FT also provide support for our operational and infrastructure needs.

LGBR Capital has retained the distribution contracts with all of our external fund managers, which include UK OEICs, UCI TS funds, hedge funds, EIS schemes and Property.

Additionally, we have acquired the ownership of Matrix Bermuda Limited, the investment manager for the Ascension funds and the Matrix funds of funds range.

The structures for these funds (sub-funds of the MAIS and MSP umbrellas) will not change. The funds are segregated funds operated by an independent board with independent service providers (administration, custody etc) and will continue to operate as normal.

Going forward, we will change the names of MAIS, MSP and MMM and I would expect this within the next three months. With the infrastructure and support outlined above, we are extremely excited by this new venture. Thank you for your patience and support recently, it is truly appreciated.”

The submission of Musst is that this document is to be taken at face value. It shows or is evidence that LGBR has effected a “buyout of the distribution and fund management business of Matrix Asset Management”. Matrix Asset Management was a trading name embracing both MMM and MAAM. Further, the notification refers also to retaining the distribution contracts with external fund managers. It refers to an imminent change of name of among others MMM.

I am satisfied that there was no acquisition. I bear in mind the following matters, namely:

Mr Reeves gave evidence that there was no transfer or acquisition did not take place. Normally, it would be right to be very suspicious of such self-serving evidence from a person demonstrated to be such an unreliable evidence. In this instance, his evidence was simply confirmatory of a position borne out either by the documents or by the absence of documents which would be supposed to have existed. The changing patterns of the positions and testimony of Mr Reeves and his conflicting accounts are such that normally no reliance can be placed upon him. The Court does not need to rely upon the evidence of Mr Reeves that his document to customers was littered with falsehoods. It is upon the absence of a document showing that such acquisition or transfer took place and the absence of evidence of what happened after the invitation which bears out that the matters contained in the invitation were not correct.

It does not surprise that Mr Reeves caused a document to be sent to customers with such misleading information, save for Matrix Bermuda Limited where there appears to have been an acquisition. Mr Reeves’ contradictory stances between the Musst v Astra action and the instant action, and his changes in this action are such that it is not surprising that he would represent matters to the outside world in the way in which he did. It is difficult to give an explanation for what he did, given his brazenness in evidence in saying that there was no transfer or acquisition. A generous approach might be that he was expecting that he might be able to achieve some of it in the coming weeks, and it was important not to lose the customers during that period. Critically, I am satisfied that there was no transfer of business to LGBR or to any other entity which prevented the assignment from being effective.

There was another email which was relied upon by Musst in the analysis that LGBR took over the business of MMM. It was in an email in August 2013 from Mr Reeves of LGBR in the following terms, namely:

“It appears that Saleem has been a little bit naughty and is conveniently forgetting to tell us of a trade into the Synthetic CDO fund that we backed away from at the beginning of the year.

It came to our attention as LGT, the client called us to say so and so did Anish the PM. I've emailed Saleem, who has begun his duck n dive but admitted that we should be paid.

The reason for letting u know is that this is a 40m growing to 80m trade. Based on 2% amc and 20% performance fee, locked for 3 years, with a fund that could do 2 to 3x, the revenue is too great to ignore ie on 2x growth on 80m, and assuming we get 30% of Mussts take, this is 96kpa to LGBR plus 960k performance fee.

Anish, Octave and LGT are very clear and will support us. We are trailing through emails. I will be asking for between 20 and 30% which is lower than the 50:50 agreed on the original unsigned agreement.”

This is said to support the fact that payment was to be to LGBR. This email does not support that LGBR had taken over an entitlement to fees from a Matrix entity. It supports the fact that Mr Siddiqi was not coming forward to share moneys, but it does not prove an entitlement to LGBR. The position was complicated as a result of MMM having gone into an insolvency procedure, but nothing in this email identifies an agreement made between Musst and Mr Reeves as to how moneys were to be shared with a new party such as LGBR if at all.

Attention was also drawn to correspondence with Mr Elliott in December 2012. At that stage, there was concern as to how Mr Elliott might be paid for his assistance. In an email of 19 December 2012, Mr Elliott stated that “I’m more than happy to have it put through LGBR”. In the same email he said that “we have a simple agreement between Musst and LGBR and it can be a model for agreements going forward.” In an email from Mr Siddiqi at the time, he stated that this “may cause an issue in that we may need to contract without LGBR as I had warned. This is what will provide comfort from a lawyer's perspective and as I have been advised…” It is difficult to follow the drift of emails but this does not prove that there was an agreement between LGBR and Musst or between LGBR and a Matrix company. On the contrary, it is consideration about the arrangement going forward, which in the end did not bear fruition by an agreement between Musst and LGBR.

The position was of course complicated. That was the result of the insolvency of the Matrix companies and in particular of MMM. Another complication was that at this stage, and despite extensive requests from Musst to Octave, no agreement had been made between Musst and Octave. That would come only in April 2013. What is not complicated is that this is further confirmation that neither was there an agreement between LGBR and Musst nor was there an acquisition or transfer from a Matrix company and in particular MMM and LGBR.

It follows for all of these reasons that the second preliminary point must be resolved against Musst. There is no evidence of an acquisition by LGBR or indeed any other third party at this stage of any of the rights of Matrix companies or MMM against Musst.