The present crisis in the economy triggers financial problems for individuals across the board. All forms of investment fraud are rising fast whilst cryptocurrency is rapidly gaining ground as the vehicle of choice for fraudsters. The lawyers in Giambrone & Partners' banking and financial fraud litigation department point out that the groundbreaking case where we secured the first order of its kind in Europe, in that permission to serve proceedings on persons unknown to two digital wallets over the blockchain by non-fungible token or 'NFT', now offers, for some victims, a route to recovery of their lost funds.
However, there are many other ways that the novice investor is being defrauded. It is not uncommon for an innocent third party to be an inadvertent facilitator of the fraud or at least in some way unwittingly aid the fraudster. Wrongdoers involved in financial fraud prefer to keep their identity and whereabouts hidden, often third party intermediary has crucial information relating to the identity of the wrongdoer but are caught by the implications of the General Data Protection Regulations (GDPR).
Frequently a bank or other financial institution governed by stringent rules and regulations aimed at maintaining strict privacy with regard to their customers find that when they are unintentionally drawn into fraudulent activities they are placed in a difficult position. The solution to the dilemma is for the claimant to apply for a Norwich Pharmacal Order (NPO)
An NPO obliges the respondent to divulge information to assist applicant in their efforts to make a claim against the fraudsters. An NPO can only be brought against a party unlikely to be involved in the potential proceedings but has been mixed up in the fraud in some way and not just as a witness to the fraud.
Demetri Bezaintes, an associate, commented "an applicant must clearly outline all the material facts and has a duty to make a full and frank disclosure to establish the validity of the potential claim and the need for an NPO." Demetri further commented "the court determines an NPO, which is an equitable remedy, meaning the enforcement of a specific action. It is only available in the jurisdiction of England & Wales and will only be granted where it is considered necessary in the interests of justice, such as to establish the name and whereabouts of the perpetrator of fraud and recipient of unlawful funds."
NPO should only be sought for a legitimate purpose, such as disclosure to enable the applicant to bring legal proceedings in order to seek compensation and redress for the fraud. NPOs are discretionary and there is no obligation on the court to grant them. However, it is highly unlikely that a court would reject an application for an NPO related to financial fraud. Our banking and financial fraud lawyers continue to expand the litigation strategies to recover our clients' money lost in crypto assets fraud, developing new litigation techniques and adapting to match the agility of the fraudsters.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
