PIs Who Broke Ex-Bank Client Confidence Found In Contempt

By Bonnie Eslinger
Law360, London (January 15, 2020, 4:42 PM GMT) — A judge ruled on Wednesday that two private investigators were in contempt of court for failing to hand over details about confidential information they unlawfully disclosed about a Tanzanian bank, whose owners had been their clients and who had been hit with money laundering allegations.

Judge Sara Cockerill ordered Nigel Brown and Alec Leighton to provide the founders of Tanzania-based FBME Bank a detailed report about their unlawful disclosure of confidential information and documents to third parties — including regulators and the U.S. Treasury — as well as affidavits specifying every leak.

The investigators told the High Court in November that they had complied with the court’s disclosure order from July, but Judge Cockerill rejected the claim as “manifestly wrong.”

The “basis for this assertion was (as was often the case with their defence at trial) broad and non-specific, failing to engage with the detail of the case against them,” the judge wrote. “That is an assertion which is manifestly wrong and it is troubling that it should be made at all, still less advanced on their behalf by counsel.”

The judge gave the private eyes 28 days to fully comply with her earlier order. She also ordered them to pay their bank clients’ legal costs for pursuing the order granted on Wednesday, £72,500 ($94,400).

The founders of FBME Bank, brothers Ayoub-Farid Michel Saab and Fadi Michel Saab, hired the investigators to look into U.S. money-laundering allegations but then sued the pair after they handed the information they uncovered to the U.S. Treasury’s financial crimes enforcement network, or FinCEN, and other authorities in August 2015, according to the London lawsuit. That same month, FinCEN cut the bank off from the U.S. financial system.

In June, Judge Cockerill found the private eyes had violated their confidentiality obligations by providing information<> about their former clients to government officials, including the U.S. Department of the Treasury<>.

The judge followed that decision with an order in July requiring the investigators company, Dangate Consulting Ltd., to hand over all documents generated during their work with the Saabs. They were also ordered to give sworn affidavits detailing every disclosure they made about their former client’s confidential information to a third party.

But the Saabs said the investigators failed to comply, and in November they asked the court to find the defendants in contempt.

The case dates from 2014, when the bank owners hired the investigators, through Quinn Emanuel Urquhart & Sullivan LLP<>, to look into findings by the U.S. Treasury’s FinCEN that there were reasonable grounds for concluding that the Tanzanian bank was an institution of “primary money-laundering concern.”

The investigators argued at trial that the public interest justified the disclosure of the confidential information. Government authorities had forced them to provide the alleged criminal evidence, they said.

Evidence of the bitter fight between the two sides became clear when, during the November hearing, a lawyer representing the bank owners accused Brown of wearing a wire — and the investigator started stripping<> in court before being admonished by the judge.

The Saab claimants are represented by David Allen QC of 7 King’s Bench Walk<>, instructed by Quinn Emanuel Urquhart & Sullivan LLP.

The Dangate Consulting defendants are represented by Steven Kay QC of 9 Bedford Row, directly instructed by the defendants.

The case is FBME Bank Ltd. and others v. Dangate Consulting Ltd. and others, case number CL-2016-000195, in the High Court of Justice Business and Property Courts of England and Wales.

–Editing by Ed Harris.