August EWJ 24 - Flipbook - Page 61
accounts etc but the complex arrangements in place
are there for good, and legitimate, reasons.
required the SFO to explain to the Judge that in fact
the suspects had received advice from two pre-eminent international law firms about the transaction in
issue. The SFO had failed to do so – a fair picture was
not painted, the defence hat was not put on.
It is worth going back to basics from time to time. In
R v Windsor and others [2011] 1 WLR 1519, Hooper LJ
noted that certainty was not required at the preliminary stage of an investigation but that uncertainly was
not in itself a reason for making a Restraint Order
(para 53), and, furthermore, that a Judge cannot rely
on “broad and unsupported statements to find reasonable
cause” (para 87).
The Holyoake v Candy case was followed by the High
Court in National Crime Agency v Baker [2020] Crim LR
976. The Holyoake principle now being applied to
proof of the underlying allegation and not just proof
of the risk of dissipation. The Court discharged three
Unexplained Wealth Orders (UWOs) and interim
freezing orders which had been granted ex parte in
respect of three London properties. Unreliable assumptions had been made by the NCA regarding the
source of the funds used to purchase the properties.
The need for caution in treating complexity of property holding through corporate structures as grounds
for suspicion, as recognised in Holyoake v Candy in the
context of the risk of dissipation of assets in civil proceedings, applied equally in the context of UWOs.
Further, the NCA had relied on the case of R v Anwoir
[2208] EWCA Crim 1354 to suggest that the manner
in which one of the properties had been purchased
led to an; “irresistible inference” that the funds could only
have derived from crime - Lady Justice Lang DBE
rejected that notion (para 99).
It may well be the case that every suspicion that a
financial investigator has, turns out to be wellfounded. But he/she could be wrong. There does still
seem to exist a failure to reign in the temptation to
overplay the existence of complicated financial/ corporate structures in statements to the Judge ruling on
the application. So far as that attitude exists it is really
no more than making assumptions and then putting
those assumptions forward as ‘broad and unsupported statements’. So long as prosecutors or financial
investigators rely on the impermissible logic of complexity equals evidence, then solicitors can challenge
Restraint Orders, search warrants, Production Orders
etc and the Courts have provided defenders with the
ammunition to do so.
About the Author
Jonathan Lennon KC is a barrister at Doughty Street
Chambers (Crime Set of the Year, 2023). In 2023 he
was recognised as one of the top 10 financial crime
barristers in London by Business Today magazine.
He is ranked as Tier 1 in both the Legal 500’s POCA
and Crime Fraud rankings.
Much depends on the issues. It may be stated that the
very structure itself is part of the means of a conducting a fraud e.g. a pension or tax fraud allegation when
the prosecution will have other evidence of dishonesty. On the other hand the client may be indicating
that in fact the assets are not his/hers as alleged or,
more usually, that there is an interest in the trusts/
Dr Richard Bateson
- Ph.D M.A. Hons (Cantab)
Investment banking, Fund management, Asset management, Derivatives,
Hedge Funds, Systematic Investing, AI and alternative data in financial markets expert
Dr Richard Bateson is founder and Chief Executive Officer of is Bateson Asset Management ('BAM'). A boutique investment
management company specialising in quantitative investing. BAM is located in London and regulated by the Financial
Conduct Authority (FCA).
BAM was established late in 2016 to specialise in AI and Machine Learning strategies exploiting alternative data sources.
The company invests in equity, currency and bond markets using cash and derivatives and acts as an advisor and consultant
to funds and managed accounts for professional and institutional investors.
Dr Bateson is the former Head of Man AHL's Dimension fund (approx.
$5bn AUM) and has held senior roles in several major
funds and investment banks including as Managing Director at the Royal Bank of Canada (RBC).
He is an industry expert in AI and alternative data in financial markets, and hosts panels and is an invited speaker at major
conferences in London and Europe. Dr Bateson was a Research Committee member of the Oxford-Man Institute of
quantitative finance at Oxford University.
Dr Bateson is currently Visiting Fellow at the Cavendish Laboratory, Cambridge University and has worked at has worked at
several leading European physics laboratories, including CERN.
He holds a first-class degree and a doctorate in Physics
from Cambridge University.
Since 2017 Dr Bateson has been engaged as an expert witness on legal cases in the UK and US involving AI /systematic
trading, hedge funds, investment banking and financial markets. Notable successful public cases include;
(i) Bridgewater Associates v. Tekmerion (Minicone and Squire) for alleged misappropriation and misuse of proprietary
investment technologies,
(ii) the UKs first major case involving AI/machine learning which featured as one of The Lawyer’s top 20 cases of 2020,
(iii) AlphaSharp Limited v. ADG Capital Management LLP involving hedge fund IP and associated quantum,
(iv) CG v. DL valuation of award-winning hedge fund for divorce settlement in family court.
He is the author of two financial books “Quantitative Hedge Funds” (WSP 2022) and “Financial Derivative Investments”
(Imperial College Press 2011).
Mobile: 07930 385206 - Email: richard@batesonam.com - Website: www.batesonam.com
Address: Kemp House, 128 City Road, London, EC1V 2NX - Area of work: Nationwide and International
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