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| − | High Court Ruling in Salinas v. Astor Asset Management: Alleged Fraud and Misrepresentation in Stock Lending Scheme
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| − | Neutral Citation Number: [2024] EWHC 2522 (Comm)
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| − | Court: Business and Property Courts of England and Wales, Commercial Court
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| − | Date of Ruling: October 7, 2024
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| − | Judge: Mr. Justice Calver
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| − | Case Summary:
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| − | The recent High Court case involved Mexican businessman Ricardo Salinas Pliego and his company, Corporacion RBS SA de CV ("RBS"), against Astor Asset Management entities and associated individuals. This case stems from an alleged fraudulent stock-lending arrangement, leading to a worldwide freezing injunction against the defendants.
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| − | Parties Involved:
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| − | • Claimants: Ricardo Benjamin Salinas Pliego and Corporacion RBS SA de CV
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| − | • Defendants:
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| − | o Astor Asset Management 3 Limited and Astor Capital Fund Limited (collectively, “Astor” entities)
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| − | o Weiser Global Capital Markets Ltd
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| − | o Tavira Monaco SAM
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| − | o Vanderbilt Capital Management Ltd
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| − | o Vladimir "Val" Sklarov, implicated as the mastermind of the alleged fraudulent scheme
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| − | Key Allegations and Background:
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| − | Salinas alleges that he was misled by Astor representatives and Sklarov, who claimed Astor was linked to the reputable American Astor family. This misrepresentation allegedly persuaded him to transfer shares in Grupo Elektra, valued at over $400 million, to custodians Weiser and Tavira as loan collateral.
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| − | In 2021, Astor 3, led by Sklarov, entered a Stock Loan Agreement (SLA) with RBS, pledging not to sell the collateral except in default. However, the defendants allegedly misappropriated and sold these shares, using the proceeds to fund their loans back to RBS and to distribute profits among themselves. The claimants argue that they sought immediate relief only upon learning that Astor was not a legitimate asset manager but rather a vehicle for Sklarov’s fraudulent activities.
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| − | The Court’s Findings:
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| − | Judge Calver concluded that there was a “good arguable case” against Sklarov and Astor, highlighting evidence of possible fraudulent misrepresentation. Key points of the ruling included:
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| − | 1. Misrepresentation of Astor's Identity: Sklarov allegedly falsely represented Astor as a reputable, Astor family-owned firm. This led Salinas to believe his funds were secure under the terms of the SLA, which prohibited selling the shares unless RBS defaulted.
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| − | 2. Misappropriation of Shares: Contrary to the agreement, Astor reportedly sold the pledged shares almost immediately after receiving them, with proceeds benefitting Sklarov and others.
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| − | 3. Systematic Fraud Pattern: The court noted Sklarov’s history of similar cases, such as cases involving Barclays and Rothschild, where he allegedly engaged in fraudulent stock-based lending schemes under reputable-sounding company names.
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| − | 4. Breach of Contract and Duty of Full Disclosure: The judge found a serious breach of contract and violations of full and frank disclosure, justifying the injunctions and freezing orders.
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| − | Implications and Future Proceedings:
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| − | This ruling underscores the court’s approach to alleged corporate fraud involving deceptive stock lending practices. The injunctions prevent defendants from disposing of the disputed funds, pending further legal proceedings.
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| − | ________________________________________
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| − | This high-profile case sheds light on international financial fraud and the importance of due diligence, particularly in high-value stock lending. As proceedings continue, further legal analysis will examine the implications for international lending and investment security.
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