CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

Fecha: 02-Oct-2025

C.14 Maple Point Overview

251.

The Maple Point Model trading was designed and implemented following the departure of Messrs Stein and L’Hote from Argre, and the DWF Ds from Solo, in 2013. As described in Appendix 3, it reproduced the essential features of the Solo Model 2012/2013 trading, using non-Solo custodians and OTC forwards rather than exchange-traded futures for the equity price hedge. It enabled those principally involved to take a greater share of the resulting profits than they took from the Solo Model trading.

252.

Maple Point Model trading extended exclusively to USPFs associated with Maple Point, a US company formed by Messrs Stein, L’Hote, La Rosa and McGee, formerly of Argre, and Donald (‘Don’) Donaldson, a New York lawyer. Mr Donaldson was appointed to act, and acted, as the authorised representative of all of the Maple Point USPFs.

253.

Other key individuals for Maple Point Model trading included:

(i)

the DWF Ds, who designed and oversaw execution of the trading; and

(ii)

Mr Klar, whose companies Potala and Sherwood acted as stock lenders and/or forward counterparties.

All of the DWF Ds were involved in Maple Point Model 2014 trading, but only Mr Horn was involved in Maple Point Model 2015 trading. Mr Klar remained involved throughout.

254.

As with Solo Model trading, the key to the whole structure for each transaction, so as to achieve internalised settlement to zero meaning that the trades would be treated as settled although no shares were acquired or transferred, was to have:

(i)

equal and opposite cum-ex trades, a USPF buying and a short seller selling, in respect of the same volume of shares in the same Danish company at the same price for settlement on a dividend payment date for that company; and

(ii)

stock loans by the USPF buyer and to the short seller entered into after the ex-date, for settlement on the same dividend payment date; such that

(iii)

the stock loans were treated as allowing settlement of the equity sales which allowed settlement of the stock loans; achieved by

(iv)

brokers who, as matched principals or agents on the equity trades, gave them up for settlement to the participating Maple Point custodian, and stock loan intermediaries borrowing from the USPF buyers and lending to the short sellers; the whole thing requiring

(v)

careful pre-planning and coordination, but neither cash nor shares.

255.

The complex wrinkle on the ‘cash’ side of unwind settlements at Solo, referred to in paragraphs 74 and 156-157 above, was ironed out for Maple Point trading by using a breakage fee. The unwind phase was traded for settlement prior to the scheduled expiry of the stock loans and forwards (as indeed it was in Solo Model trading). That involved an element of ‘early termination’. A breakage fee was calculated to match, and cancel out, what would otherwise have been a trading profit, on paper, for one side of the trade or the other (the short or the long), leaving aside the tax reclaim. To illustrate that, using Sample Trade NCB 2 relating to 920,000 Coloplast B shares:

(i)

on the initial trade date, a USPF bought at DKK517 and sold forward at DKK514.61372, for a paper loss of (DKK2,200,269.47);

(ii)

on the settlement date, the USPF was treated as receiving cash collateral of DKK476,699,850, but immediately returning DKK3,028,934.25 of it, giving it a cash collateral balance, on paper, of DKK473,670,915.75;

(iii)

also on the settlement date, the USPF was credited with a dividend compensation amount of DKK3,028,934.25;

(iv)

on the unwind trade date, the USPF sold at DKK484.60 and bought forward at DKK484.85307, for a paper loss of (DKK233,343.19);

(v)

on the unwind settlement date, the accrued collateral to be returned was DKK473,670,915.75 plus stock lending net cost (interest on collateral less lending fee) of DKK581,299.47, a total of (DKK474,252,215.22);

(vi)

(i) + (ii) + (iii) + (iv) + (v) = DKK14,022.12, i.e. a net overall profit for the USPF in that amount, if there were no breakage fee;

(vii)

a breakage fee of (DKK14,022.12) was therefore applied to balance the books, payable by the USPF to the stock loan trading counterparty, and by that counterparty to the short seller.

256.

A stock loan termination fee was charged to the USPF, and a smaller such fee was charged to the stock loan intermediary, as the mechanism by which to pay to the stock loan intermediary and the short seller their agreed percentages of the dividend amount referenced in relevant trade. If the stock loan intermediary was also the forward counterparty (NCB and Lindisfarne trades), this also dealt with that party’s profit share as forward counterparty. In Indigo trades, where the forward counterparty was different, a separate termination fee was charged to the USPF only, i.e. not also on the back-to-back forward with the short seller, so as to pay the forward counterparty its reward for participation.

257.

As in Solo Model trading, no Maple Point custodian ever held any Danish shares, directly or via any sub-custodian, as custodian for any of the USPF buyers, short sellers or stock loan counterparties, or at all, or received any dividend payment as part of any distribution from a Danish company, via VPS and a custody chain. As Mr Sharma put it concisely in his expert report, “the trades were structured so that no shares or cash (other than the dividend reclaim [i.e. tax refund] amount) needed to be sourced externally”. In fact, “to be sourced externally” adds nothing (it is a clouding use of jargon: paragraph 70 above). Putting it plainly, by design there was no need for shares or cash to execute or settle the trades, given how they were in fact settled.