The Bahamas-registered entity of London Capital Group Ltd (LCG), a retail foreign exchange and contracts for variations (CFDs) dealer, has ceased its operations and introduced publicly that it has been unattainable to hold out its operations following the chapter of its Swiss mum or dad firm, FlowBank.
“LCG Capital Markets Restricted maintains funds with accounts at FlowBank SA,” the discover on the web site of the offshore entity of LCG acknowledged. “Because of vital agreements between LCG Capital Markets Restricted and FlowBank SA, the appointment of the Liquidators has at the moment made it unattainable for LCG Capital Markets Restricted to hold out its operations.”
The Chaos After FlowBank’s Chapter
LCG is owned by FlowBank, based by former LCG CEO Charles-Henri Sabet. Beforehand, LCG was a part of the London Capital Group Holdings, which encountered hassle after delisting from the London Inventory Trade and NEX Trade in 2018. That very same yr, Charles-Henri Sabet, then CEO, purchased LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.
The entity working the LCG model below the Bahamas license provides foreign exchange and contracts for variations (CFDs) devices. In the meantime, one other Monetary Conduct Authority-registered entity, which operates LCG within the UK, modified its enterprise mannequin final yr, turning into an introducing dealer for IG, as soon as its rival firm.
The discover by the Bahamas-registered LCG Capital Markets Restricted got here solely over every week after the FCA imposed restrictions on onboarding new purchasers and taking deposits to the UK-registered sister entity.
The discover on LCG Capital Markets Restricted’s web site
Drive Majeure
Now, the Bahamas-registered LCG is contemplating that “an emergency or an distinctive market situation exists which [might] forestall [it] from performing all or any of our obligations.” The corporate is figuring out to implement this below ‘pressure majeure occasions’.
“Drive Majeure Occasions embrace the next occasions: (i) any act, occasion or incidence (together with any strike, riot or civil commotion, industrial motion, acts and laws of any governmental or supranational our bodies or authorities) that, in our affordable opinion, prevents us from sustaining an orderly market in a number of of the indices/markets in respect of which we ordinarily settle for transactions,” the discover added.
The chaos began when the Swiss regulator cancelled FlowBank’s license final month and declared the corporate bankrupt. The Bahamas-registered LCG can also be now engaged with FlowBank’s chapter liquidators.
In the meantime, the bulk shareholder of FlowBank known as the transfer by the Swiss regulator a “violation of rights” and intends to take “all essential procedures” to problem the regulator’s resolution.
