Paris Rules Against Custodians

The Paris Court of Appeal has forced two custodians to repay funds to asset managers that were frozen after the collapse of Lehman Brothers
By None

The Paris Court of Appeal has forced two custodians to repay funds that were frozen after the collapse of Lehman Brothers.

The Court ruled on 8th April 2009 that Societe Generale is to return EUR3.2 million to Day Trade Leverage (DTL), a fund of the asset management firm Day Trade Asset Management. SGSS has already returned EUR755,688 to DLT on the 13th October 2008.

The Court also ruled that RBC Dexia return shares to the Laffitte Risk Arbitrage Fund that were frozen due to the liquidation of the Funds prime broker Lehman Brothers Europe.

A spokesperson from Laffitte Capital Management said: This decision reflects the safety and the real strength of the French regulations concerning alternatives funds.

A spokesperson from Societe Generale said: By transferring to the custodian the consequences of management decisions by asset management companies and prime brokers, this decision puts in question the rules governing relations between these parties, and probably also the depositary activity in France for funds that have appointed prime brokers.

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