17th May 2017, 14:06
The Supreme Court has ruled that a Jyske Bank employee acted "knowingly and dishonestly" in assisting the Marrache brothers to steal client funds.
The case was brought by representatives of clients of the collapsed law firm.Jyske Bank was the main bank for Marrache & Co and is liable for their employee’s actions.
The Marrache brothers – Isaac, Benjamin and Solomon – were convicted of conspiracy to defraud client monies totalling almost £30 million.
Jyske Bank had argued the claim against them, concerning the bank’s alleged involvement in this fraud, was misconceived and entirely coloured by hindsight.
Appearing for former clients of Marrache & Co, Adrian Hyde and Edgar Lavarello argued that Jyske Bank failed to report the Marraches’ actions, and received funds they knew were in breach of trust.
In his 104 page judgement, Puisne Judge Mr Justice Adrian Jack says a senior Jyske Bank employee, Bill Bishop, "did knowingly and dishonestly assist the Marrache brothers to steal client funds".
Mr Bishop was a Senior Credit Administrator and had no formal training in the Solicitor Accounts Rules governing the use of client accounts. But the judge says the employee “simply must have been aware that client monies had gone missing, stolen by the Marrache brothers”. Mr Justice Jack says some of the transfers made between 2004 and 2010 – some of them involving hundreds of thousands of pounds – are incapable of an honest explanation.
The judge says the losses incurred by former clients of the collapsed law firm Marrache & Co all happened after Jyske's involvement in the Marrache fraud. Mr Justice Jack says the bank is "therefore (subject to an account and a point of limitation) liable to all of them for dishonest assistance".
Jyske Bank contemplating an appeal
Reacting to the Supreme Court judgment, a spokesperson for Jyske Bank said:
“Today’s ruling comes as a surprise to the Bank. We chose to take the matter to court as we believed in our case and are therefore very disappointed with the outcome. However we will now take some time to digest and study the comprehensive judgement before we decide on the next steps, which may include an appeal”.
Adrian Hyde, partner at CVR Global and joint-liquidator of Marrache & Co brought the case alongside Edgar Lavarello on behalf of former clients of Marrache & Co.
Hyde said: “The judgment has made it very clear that Jyske did knowingly and dishonestly assist the Marrache brothers to steal client funds.
“The judge has found that substantial losses incurred by former clients of Marrache & Co happened after Jyske Bank’s involvement in the Marrache fraud, so Jyske are liable to these clients for this dishonest assistance.
“Millions of pounds were lost by clients of Marrache & Co during this grossly unacceptable fraud and we are extremely pleased this judgment has been handed down.
“This judgement will result in millions of pounds being repaid by Jyske Bank, along with substantial further interest, and is a very positive outcome for those defrauded so badly.”