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

Whilst at Solo, Mr Bains himself signed a substantial number of SCP CANs. As part of the development of the Solo Model, Mr Bains was involved in assessing SCP’s ability properly to implement the Model as an FCA regulated entity, for which he took external advice on a number of points (including from Pinsent Masons and CMS Cameron McKenna), in which he was open, where it seemed to him relevant, that SCP would never hold shares in custody at any stage. For example, on 8 March 2012 Mr Bains confirmed to Michael Lewis of Pinsent Masons, in the context of some advice he was taking from him, that “Most of our transactions will be structured transactions in the following sense: we expect one client to be long 100 shares in stock X whilst another client is short 100 shares in stock X. No actual stock needs to be custodied with a subcustodian because of this ‘net-off’. Indeed, we do not expect actual cash to be custodied with a subcustodian.” There is room for the view that Mr Bains should have seen the share-less nature of the Solo Model as relevant generally to any external legal advice he took in connection with it; but I do not accept the submission made by SKAT that he was deliberately withholding that detail, when he did so, because of any concern that it had the result that the Solo Model trading gave rise to fraud on SKAT.

Mr Bains assisted with the implementation of Solo Model test trades and oversaw the onboarding of Solo Model participants. He drafted at least the early versions of the Ganymede consultancy or service agreements through which Ganymede would take the lion’s share of Solo Model tax refund claim proceeds and reward trading counterparties for their participation.

Mr Bains was not involved in obtaining any Danish tax law advice, which he left to the structurers, Mr Horn and Rajen Shah, reporting to Sanjay Shah. I consider that he should not have done that. Following the backlash in Germany against cum-ex trading there, including by 2011 the possibility for views to be taken that it involved criminal conduct, and given Mr Bains’ qualifications and his roles at SCP, he should have insisted that he have at least oversight of the legal advice being sought and the ability to review any legal advice obtained, if not prime responsibility for seeking and obtaining it. Mr Bains did not take that approach. That does not mean, however, and I do not find, that Mr Bains knew or believed that the Solo Model trading provided no proper basis for submitting tax refund claims for consideration by SKAT, let alone that it resulted in fraud, i.e. the communication of falsehoods to SKAT with a view to inducing it to pay.