The Bahamas-registered entity of London Capital Group Ltd (LCG), a retail forex and contracts for differences (CFDs) broker, has ceased its operations and announced publicly that it has been impossible to carry out its operations following the bankruptcy of its Swiss parent company, FlowBank.
“LCG Capital Markets Limited maintains funds with accounts at FlowBank SA,” the notice on the website of the offshore entity of LCG stated. “Due to significant agreements between LCG Capital Markets Limited and FlowBank SA, the appointment of the Liquidators has currently made it impossible for LCG Capital Markets Limited to carry out its operations.”
The Chaos After FlowBank’s Bankruptcy
LCG is owned by FlowBank, founded by former LCG CEO Charles-Henri Sabet. Previously, LCG was part of the London Capital Group Holdings, which encountered trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. That same year, Charles-Henri Sabet, then CEO, bought LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.
The entity operating the LCG brand under the Bahamas license offers forex and contracts for differences (CFDs) instruments. Meanwhile, another Financial Conduct Authority-registered entity, which operates LCG in the UK, changed its business model last year, becoming an introducing broker for IG, once its rival company.
The notice by the Bahamas-registered LCG Capital Markets Limited came only over a week after the FCA imposed restrictions on onboarding new clients and taking deposits to the UK-registered sister entity.
Force Majeure
Now, the Bahamas-registered LCG is considering that “an emergency or an exceptional market condition exists which [might] prevent [it] from performing any or all of our obligations.” The company is determining to implement this under ‘force majeure events’.
“Force Majeure Events include the following events: (i) any act, event or occurrence (including any strike, riot or civil commotion, industrial action, acts and regulations of any governmental or supranational bodies or authorities) that, in our reasonable opinion, prevents us from maintaining an orderly market in one or more of the indices/markets in respect of which we ordinarily accept transactions,” the notice added.
The chaos started when the Swiss regulator cancelled FlowBank’s license last month and declared the company bankrupt. The Bahamas-registered LCG is also now engaged with FlowBank’s bankruptcy liquidators.
Meanwhile, the majority shareholder of FlowBank called the move by the Swiss regulator a “violation of rights” and intends to take “all necessary procedures” to challenge the regulator’s decision.
The Bahamas-registered entity of London Capital Group Ltd (LCG), a retail forex and contracts for differences (CFDs) broker, has ceased its operations and announced publicly that it has been impossible to carry out its operations following the bankruptcy of its Swiss parent company, FlowBank.
“LCG Capital Markets Limited maintains funds with accounts at FlowBank SA,” the notice on the website of the offshore entity of LCG stated. “Due to significant agreements between LCG Capital Markets Limited and FlowBank SA, the appointment of the Liquidators has currently made it impossible for LCG Capital Markets Limited to carry out its operations.”
The Chaos After FlowBank’s Bankruptcy
LCG is owned by FlowBank, founded by former LCG CEO Charles-Henri Sabet. Previously, LCG was part of the London Capital Group Holdings, which encountered trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. That same year, Charles-Henri Sabet, then CEO, bought LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.
The entity operating the LCG brand under the Bahamas license offers forex and contracts for differences (CFDs) instruments. Meanwhile, another Financial Conduct Authority-registered entity, which operates LCG in the UK, changed its business model last year, becoming an introducing broker for IG, once its rival company.
The notice by the Bahamas-registered LCG Capital Markets Limited came only over a week after the FCA imposed restrictions on onboarding new clients and taking deposits to the UK-registered sister entity.
Force Majeure
Now, the Bahamas-registered LCG is considering that “an emergency or an exceptional market condition exists which [might] prevent [it] from performing any or all of our obligations.” The company is determining to implement this under ‘force majeure events’.
“Force Majeure Events include the following events: (i) any act, event or occurrence (including any strike, riot or civil commotion, industrial action, acts and regulations of any governmental or supranational bodies or authorities) that, in our reasonable opinion, prevents us from maintaining an orderly market in one or more of the indices/markets in respect of which we ordinarily accept transactions,” the notice added.
The chaos started when the Swiss regulator cancelled FlowBank’s license last month and declared the company bankrupt. The Bahamas-registered LCG is also now engaged with FlowBank’s bankruptcy liquidators.
Meanwhile, the majority shareholder of FlowBank called the move by the Swiss regulator a “violation of rights” and intends to take “all necessary procedures” to challenge the regulator’s decision.
This post is originally published on FINANCEMAGNATES.
