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

Mr Urra and Mr Sheth did not keep written records of the RFQs or clients where they decided to test the theory that clients were splitting orders, in circumstances where Mr Urra accepted that he would not have tested the strategy against, eg, Banca Popolare, and where Mr Sheth tested against some clients on multiple occasions but not for every RFQ, eg in relation to ICBC. They did not keep records of how long they kept a Large Order on the market before deciding to cancel on each occasion. They did not share with each other the outcomes from having tested the strategy in respect of particular clients. Mr Sheth’s evidence was that he had expressed (to Mr Urra) his frustration that the strategy was not working, but this was not said to be any more detailed than saying that his Large Orders were not trading. One purpose of the Information Discovery Strategy is said to be to gain information, and that there is some information to be gained even where a Large Order does not trade, yet there was no attempt to record this information.

Whilst Mr Lopez has exhibited a list of the 93 RFQs the Desk had received during the Relevant Period where the cash trade would have required a hedge of 200 lots, there was no evidence that he had kept written records of patterns or predictions as to clients, timing, or direction at the time. We would not, however, necessarily expect that Mr Lopez would have been keeping a record of his pricing analysis, or where he considered resistance and support levels were forming, throughout the day.