The Securities and Investments Board v Scandex Capital Management AS & Jeremy BartholomewWhite

The Securities and Investments Board v Scandex Capital Management AS & Jeremy BartholomewWhite The first Defendant, Scandex Capital Management AS, Scandex was a Danish company, now in liquidation, of which the second Defendant, Mr BartholomewWhite was managing director and in which he held one third of the share capital. Scandex was incorporated in September 1995 and submitted an application for authorisation to do investment business to Finans the Danish investment business regulatory authority in late December 1995. There was some confusion as to the exact date that Scandex commenced doing investment business but it was clear that by April 1996 it was sending letters to individual investors in the UK, offering investment services involving foreign exchange trading for and on behalf of UK investors had sent mailshots directed at investors into the UK had made unsolicited calls offering forex trading services and, had also made misleading statements about, inter alia, the level of commission Scandex was charging its clients. Significant losses were incurred by UK investors as a result of their dealings with Scandex. Scandex had been operating in Denmark on the basis of interim authorisation from Finans under transitional provisions of Danish law implementing the Investment Services Directive 9322EEC, hereinafter referred to as ISD, pending Finans' determination of its application for full authorisation to do investment business. When, in late April 1996, SIB enquired on what basis Scandex was coldcalling and advertising speculative forex dealing services in the UK, Scandex replied that it was doing so under the passporting provisions of the ISD since it was authorised in Denmark and therefore entitled to offer crossborder investment services. In the event, Scandex' Danish authorisation under the transitional provisions of Danish law came to an end in September 1996 when Finans considered and rejected its application for authorisation. The Danish regulator was concerned about the contents of an audit report it had asked for on Scandex, which prompted the resignation of Scandex' two Danish directors, and also the fact that there was no evidence to show that Scandex had traded in Denmark as opposed to using its office as a launch pad for approaching clients based outside Denmark. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Regulation and Compliance Emerald Publishing

The Securities and Investments Board v Scandex Capital Management AS & Jeremy BartholomewWhite

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1358-1988
DOI
10.1108/eb024947
Publisher site
See Article on Publisher Site

Abstract

The first Defendant, Scandex Capital Management AS, Scandex was a Danish company, now in liquidation, of which the second Defendant, Mr BartholomewWhite was managing director and in which he held one third of the share capital. Scandex was incorporated in September 1995 and submitted an application for authorisation to do investment business to Finans the Danish investment business regulatory authority in late December 1995. There was some confusion as to the exact date that Scandex commenced doing investment business but it was clear that by April 1996 it was sending letters to individual investors in the UK, offering investment services involving foreign exchange trading for and on behalf of UK investors had sent mailshots directed at investors into the UK had made unsolicited calls offering forex trading services and, had also made misleading statements about, inter alia, the level of commission Scandex was charging its clients. Significant losses were incurred by UK investors as a result of their dealings with Scandex. Scandex had been operating in Denmark on the basis of interim authorisation from Finans under transitional provisions of Danish law implementing the Investment Services Directive 9322EEC, hereinafter referred to as ISD, pending Finans' determination of its application for full authorisation to do investment business. When, in late April 1996, SIB enquired on what basis Scandex was coldcalling and advertising speculative forex dealing services in the UK, Scandex replied that it was doing so under the passporting provisions of the ISD since it was authorised in Denmark and therefore entitled to offer crossborder investment services. In the event, Scandex' Danish authorisation under the transitional provisions of Danish law came to an end in September 1996 when Finans considered and rejected its application for authorisation. The Danish regulator was concerned about the contents of an audit report it had asked for on Scandex, which prompted the resignation of Scandex' two Danish directors, and also the fact that there was no evidence to show that Scandex had traded in Denmark as opposed to using its office as a launch pad for approaching clients based outside Denmark.

Journal

Journal of Financial Regulation and ComplianceEmerald Publishing

Published: Apr 1, 1997

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