UK High Court Judgment in MF Global Special Administration on “Hindsight Application”

Today the UK High Court handed down judgment on the MF Global UK Limited “Hindsight Application”. The Court ruled that “the hindsight principle is not applicable to the determination of claims to client money for the purposes of a distribution under CASS 7A”.

Pursuant to the FSA’s CASS Rules, in the normal course of business, investment firms are required to segregate money received from, or held for, their clients and hold it on trust for them. Upon the occurrence of a primary pooling event, such as the appointment of the Administrators to MF Global UK Limited, such trust monies are notionally pooled and must be distributed among the clients on a pro rata basis according to their entitlements.

Read the full article here.