UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

We have set out Mr Lopez’s explanation of the Anticipatory Hedging Strategy above.

In his witness statement Mr Lopez had sought to use the information that is available to reconstruct his trading activity in the Instances (setting out where his Small Orders were hedges for cash bond transactions or adjustments to his curve position, the cash bonds he bought on his own initiative rather than in response to an RFQ, and his opinion on market movements at particular times by reference to the price graphs). Both in his witness statement and in cross-examination Mr Lopez referred to the information that is no longer available, with his evidence being that his decisions on the placing of large orders (both the Large Orders and the Non-Instance large orders), and the timing of cancellation, would have been a result of the information that is and is not available, including other market events or market movements. We record that, in contrast to Mr Urra and Mr Sheth, Mr Lopez did not say that he was reducing the use of his strategy – he said he was being meticulous and trying to trade, but was not (as a result of the Eurex Letter and the instruction given to the Desk not to place orders away from the touch) given time to pursue his strategy.

The Authority submitted that the Large Orders placed by Mr Lopez were not placed in pursuance of a pre-positioning or anticipatory hedging strategy. Mr Shivji submitted that Mr Lopez has reverse-engineered a purported rationale and presented it as a recollection (in his interview with HR and initially in the interview with the Authority) and now as a reconstruction.