Weavering directors win appeal against $111M fine
Sir John Chadwick, President, Cayman Islands Court of Appeal
(CNS Business): Three years after hearing the appeal, the Cayman Islands Court of Appeal delivered its much-anticipated ruling in the infamous Weavering case last week and threw out the record-breaking $111 million fine imposed by the trial judge. The appeal judges said that the behaviour of the directors, Stefan Peterson and Hans Ekstrom, in the collapsed Cayman fund may have amounted to “general incompetence” but that was not enough to meet the legal standards of “wilful neglect or default”.
The panel found there was not enough evidence to prove that the former directors had made a deliberate and conscious decision to act in breach of their duty.
“Negligence, however gross, is not enough,†said the court’s president, Justice Sir John Chadwick, in the long-awaited decision.
Peterson and Ekstrom are the brother and step-father of the former London-based Weavering boss, Magnus Peterson, who was recently jailed for 13 years for multiple counts of fraud and forgery, which caused investors to lose over a half billion dollars.
In 2011 Peterson and Ekstrom, who had been running the Cayman-domiciled Weavering Macro Fixed Income Fund, were found guilty of “willful neglect or default” and hit with the massive financial penalty. But having successfully won their appeal they are no longer liable for the damages as the appeal court said there was not enough evidence to prove the men had deliberately acted in breach of their duties.
Category: Finance, Financial Crime
