A fraud action brought by a group of high networth investors failed at the High Court: Mr Justice George Birmingham today found there was no evidence of fraud by Anglo in relation to how the investment was promoted and managed and also dismissed all other claims by Mr McCaughey concerning the investment.
The judge said Mr McCaughey clearly "now regrets his investment decision but investor remorse does not provide a basis for a successful legal action".
"Had the hotels been disposed of at a time when they had increased in value very substantially and had a profit been recorded, his attitude might well have been different," the judge added. "Unfortunately that didn't happen and it appears that the plaintiff is now facing a loss on his investment."
"However, that is sometimes the lot of those who participate in high risk investments," he said.
In the absence of evidence - typically smoking gun emails or other documents showing fraud - it is very difficult for investors to win these types of cases. A large number of similar cases are now in the courts in the United States against virtually every major financial institution including Goldman Sachs and Bank of America. Many of these will suffer a similar fate as mere loss is not sufficient to hold the institution liable.
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