CL-2020-000117 - [2025] EWHC 1620 (Comm)

This part of the claim falls into a different category from those so far considered. It concerns 9 investments in conventional investment products which are not alleged to be illegitimate in nature, in marked distinction to the investments so far considered. They were sold between 15 October 2015 and 17 October 2016 at a combined loss of €22.16m. In relation to three of these investments – two issued by EFG International Finance Guernsey Limited (“EFG”) and one issued by Notenstein Privatbank AG (“Notenstein”) – SVC earned commission totalling €7.1m for introducing Falcon to the investment opportunity. The claimant alleges of these investments that they

“… had no honest justification and it must be inferred that they were also tainted with fraudulent intent on the part of Mr Ingmanson and Mr Ökten. This is plainly the case in respect of the two EFG investments and the Notenstein investment, where indefensible commissions were paid to SVC (UK) (totalling US$8m, of which payments of US$850,000 and €53,000 were made to Mr Ökten). The Claimant lost €16.2m alone in respect of these three investments alone. In the absence of any Defendant having attempted to justify them, the remaining Other Investments are to be inferred also to be part of Mr Ingmanson’s fraudulent schemes, given the anomalies and uncommercial features explained in detail by Mr Holt. The Claimant lost €22.13m in total in respect of all of the Other Investments.”

The primary loss claimed against the remaining defendants is the difference between the purchase cost and the realised sale price of €22.13m. However, as the claimant accepts in its written closing submissions, there is less factual information available in relation to the acquisition and disposal of these investments. Even so, the claimant submits that the “… large commissions being paid to SVC (UK) at the moment of entry into the investment, … are out of kilter with any genuine commission (although any commission would involve a breach of fiduciary duty). In one case the commission was 49% and the others were in the 30s, so it is apparent that these investments were thinly veiled straightforward wrongful misappropriations or extractions … These total €16.2 million.” The commission itself was, as indicated above, rather less than that.

With some hesitation, I accept the claimant’s submission that the case that Messrs Serwin and Ökten acted in breach of duty by procuring Falcon to invest in products where they were going to benefit from a secret commission and that the claimant should be entitled to all of the losses it sustained in consequence (alternatively, at a minimum, the losses represented by the amount of the hidden commission) is within the pleaded contentions set out above under Maltese law and within the overall quantum sought.

In my judgment this part of the claim succeeds only in relation to the three transactions to which I have so far referred. I am not satisfied that the evidence sufficiently established liability on the basis pleaded in relation to the remainder. In relation to the three investments that I consider the claimant is entitled in principle to recover damages for, I am satisfied that this is so because there was a manifest conflict of interest that resulted in commissions being recovered by (ultimately) Messrs Serwin and Ökten that should not have been payable at all but were in my judgment manifestly excessive. I now turn to the detail concerning these transactions.