Stefan Peterson and Hans Ekstrom are the brother and step-father of the former Weavering Capital boss, Magnus Peterson, who was sent to jail for 13 years last month after his misconduct – which included multiple counts of fraud and forgery – caused investors to lose $530m (£344m, €465m).
In 2011, Peterson and Ekstrom – who previously ran the Cayman-domiciled Weavering Macro Fixed Income Fund – were found guilty of “willful neglect or default” and subsequently hit with the record $111m penalty.
However, the pair filed a complaint against this decision and last week the three Court of Appeal judges unanimously agreed to withdraw the fine, three years after the appeal was heard.
Previously Peterson and Ekstrom were said to have acted in breach of their duties to exercise independent judgment and take reasonable care, meaning they were personally liable for damages.
But the appeal judges argued that there had been a lack of evidence proving that the former directors had made a deliberate and conscious decision to act in breach of their duty. “Negligence, however gross, is not enough,” said Justice Chadwick.
It was concluded that the directors’ conduct, which included signing documents they had not read, might have amounted to “general incompetence” but that was insufficient to meet the legal standards of “willful neglect or default”.
London-headquartered Weavering Capital went into administration in March 2009.
