Essex Boys oil traders fail in a court challenge
The group of traders dubbed the "Essex Boys", who enjoyed a $700 million windfall from oil futures when the pandemic caused chaos in markets, have lost a legal battle to stop regulators from gaining access to their records.
The Commodity Futures Trading Commission in the United States is investigating the activities of the traders at Vega Capital London, and the Financial Conduct Authority, the British watchdog, is helping the American regulator with its inquiry.
The UK watchdog ordered 11 traders to hand over their records, which the Essex Boys resisted by seeking approval for a judicial review of the British watchdog's decision to assist the US watchdog. The High Court rejected this request in May.
The traders went to the Court of Appeal, which refused them permission for a judicial review yesterday.
The FCA welcomed the decision and said
- It had "arranged to ensure the traders provide all materials requested by the CFTC without further delay".
It marks the latest twist in the saga over Vega, an obscure trading outfit that has its registered office on a trading estate in Essex. Vega was thrust into the spotlight in 2020 when it emerged that the small band of traders had generated huge profits in April that year when oil prices collapsed at the start of the Covid outbreak.
Prices dropped as the market panicked that demand for crude would dry up. Working from their homes, traders at Vega made a fortune in a single day on April 20 when the price of West Texas Intermediate crude futures tumbled below zero into negative territory for the first time on record. Their trading has since attracted the attention of the US regulator.
Mark Steward, the FCA's executive director of enforcement and market oversight, said it "will not permit subjects of international investigations who are located in the UK to hide behind unmeritorious claims or to delay international investigations through abuse of legitimate remedies".
Evan Flowers, a partner at Dechert, the law firm, representing the traders, said: "Our clients did nothing wrong by trading their own view of the market on April 20, 2020, and remain confident the US regulator will come to that conclusion after reviewing the evidence."
See the FCA press release
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