The supreme court ruled on Wednesday that “participation in the CMP [of Lehman] is not dependent on the segregation of client money”.
“Where money is received from a client or from a third party on behalf of a client, it would be unnatural, and contrary to the primary purpose of client protection, for the money to cease to be the client’s property on receipt, and for it (or its substitute) to become his property again on segregation,” the supreme court judges said.
The supreme court’s ruling has brought “additional clarity” to the matter as regards clients of bankrupt MF Global UK, KPMG, which is the administrator for MF Global UK, said on February 29.
But the ruling also means that distribution of the client money pool will be spread more widely, it said, noting that it had prepared for this eventuality.
'Substantially reduced payout'
“Today’s judgment is likely to result in...