Morrogh ruling may spark new law

FINANCE Minister Charlie McCreevy is investigating changing legislation following a High Court ruling which permits the confiscation of client funds held in trust to pay the costs of a receiver.

Disgruntled clients of defunct stockbroking firm W&R Morrogh are to abandon plans to mount a Supreme Court challenge to the decree by Mr Justice Roderick Murphy. This ordered a portion of up to 16 million in shares held in trust in their names by the failed stockbroker should be used to pay the estimated 3m costs of receiver Tom Grace of PricewaterhouseCoopers.

If Mr Justice Murphy's ruling is left unchallenged then billions of euro in shares held in trust electronically by stockbrokers are at risk of being seized in a default situation to pay the costs of administering the winding up of a firm and the distribution of the assets, if any, that remain.