James Potts and Anca Bunda appeared for the claimants, AFL (an FCA-regulated insurance brokerage firm) and its majority ultimate shareholder, Next Generation Holdings Ltd, in a civil fraud claim against AFL’s former Chairman and CEO, Alec and Bob Finch. The claimants alleged that the defendants carried out an accounting fraud between 2011 and 2019, misappropriated client money, and induced NGHL by fraud to acquire a majority stake in AFL in 2017. The claims included breach of statutory duty, conspiracy, fraudulent misrepresentation and fraudulent breach of warranty.
A 3-week trial took place before HHJ Johns KC in the Chancery Division in June 2023.
In a judgment handed down on 27 September 2023, HHJ Johns found for the claimants on all causes of action, awarding the claimants over £6 million in damages. The judge found that there had been a £3.51m hole in AFL’s client money accounts at the date of the sale to NGHL. The quantum of a further claim by Next Generation Holdings Ltd for loss of the price paid for AFL’s shares will be determined at a further hearing.
Full judgment available here