Justice Michael Briggs ruled that LBIE did not do enough to segregate investor funds from their own money according to rules outlined by the Financial Services Authority (FSA).
When it collapsed, LBIE had $2.1 billion worth of client claim funds, $1 billion of which was deposited with the bankrupt Lehman Brothers Bankhaus AG.
Investors and affiliates of LBIE have now made claims of up to $3 billion against the fund.
The High Court judgement was made following an application by PricewaterhouseCoopers (PwC), the bankâs administrators, on how to manage client funds.
Andrew Clark, partner at PricewaterhouseCoopers leading the team managing the client money matters, said: âThere has been a significant uncertainty over who is entitled to claim the client money which LBIE is holding.
âThis decision provides clarity and enables us to confirm client entitlements.â
PwCâs application raised 30 questions relating to the use of the FSAâs Client Assets Sourcebook (CASS).
The CASS is used to determine client money entitlements.
By Jim Ottewill