Following the recent court judgment in Holland, I am reviewing this section.
Ocean-Seed questions following the Dutch court judgment
I’m still waiting to see an official translation of the judgment. However, it appears that the judgment may have concentrated on whether the investment agreements the investors signed were valid. It appears that the court determined that the clients of Ocean Seed were sophisticated investors, so would have known what they were doing.
What is not yet clear is whether the court also considered the nature of the wine contracts and whether they could be fulfilled. Was the wine scheme based on acquiring physical wine at some point or was it a wine futures scheme. In effect was the Ocean International Marketing sales force selling wine or securities.
If they were selling wine, were there any reservations/options taking on wine beyond the known series of apparently unfulfilled options negotiated with Bordeaux Index? If all the wines sold were not covered by options, how could Ocean-Seed be sure of securing the required wines, in particular the classed growth Bordeaux, with suitable provenance when the contracts matured. Were expert witnesses called in during the court case to establish this?
If they were selling securities, was Ocean-Seed licensed in Holland to sell securities. Equally was Ocean-Seed licensed to sell securities in the United States to its citizens? The various cease and desist orders issued in the United States would suggest that Ocean-Seed was not licensed to sell securities in some, if not all, US states.
Did the Dutch court establish the total sum Ocean-Seed clients paid into the wine scheme, what funds they received in return, whether any clients received wine and whether there were any stocks of wine in bonded warehouses etc..
It will be interesting to see how far the Dutch provided answers to these questions.