FNG Exclusive… Following our earlier exclusive report from the end of June that London based Retail FX and CFDs broker London Capital Group Ltd (or LCG, at website lcg.com) had severe restrictions put on its FCA license and on its operations, FNG has learned that the group’s offshore arm, LCG Capital Markets Limited in the Bahamas, which operates under both the LCG and FlowBroker brands, has also effectively shut down.
Both London Capital Group Ltd (UK) and LCG Capital Markets Limited (Bahamas) are subsidiaries of Switzerland based neobank / neobroker FlowBank, which was founded and run by former LCG CEO Charles-Henri Sabet. FlowBank was forced into bankruptcy and liquidation last month by Swiss financial regulator FINMA, which claimed that FlowBank no longer has the minimum capital required for its business operations, with fears that the company is over-indebted.
While the Swiss regulators, alongside appointed liquidator Walder Wyss Ltd., are already in the process of reimbursing secured deposits to former FlowBank clients, they are also in the process of protecting and monetizing FlowBank’s other assets to repay all of FlowBank’s creditors. These assets include the LCG / FlowBank operation.
LCG Bahamas / FlowBroker has decided that the appointment of liquidators at parent FlowBank has currently made it impossible for LCG Capital Markets Limited to carry out its operations.
LCG Bahamas, which as noted above also had begun operating under the brand FlowBroker (at website flow-broker.com), sent a letter to its clients explaining the situation. The letter reads as follows.
Information Letter to the clients of LCG Capital Markets Limited (a.k.a. “FlowBroker”)
LCG Capital Markets Limited (additional trade name “FlowBroker”) is wholly owned by FlowBank SA, a Swiss Regulated entity until June 13, 2024. On that date, the Swiss Financial Market Supervisory Authority (FINMA) opened bankruptcy proceedings against FlowBank SA. FINMA appointed Walder Wyss SA, succursale de Genève, 14 rue du Rhône, P.O Box, 1211 Geneva 3 as bankruptcy liquidators (the Liquidators). The place of jurisdiction for the bankruptcy is FlowBank SA head office in Geneva. This has effectively stopped FlowBank SA operations.
LCG Capital Markets Limited maintains funds with accounts at FlowBank SA. 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.
We draw reference to section 25 of our Terms and Conditions, which provides as follows:
FORCE MAJEURE EVENTS We may, in our reasonable opinion, determine that an emergency or an exceptional market condition exists which may prevent us from performing any or all of our obligations (a Force Majeure Event). Following the occurrence of a Force Majeure Event, we will inform BHS (ourselves) and take reasonable steps to inform you.
Force Majeure Events includes 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 supra national 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.
At the time of this writing, LCG Capital Markets Limited has engaged the Liquidators. We will update you as more information becomes available to us. For any additional inquiries, clients can continue to contact Customer Support at Email: customerservices.bhs@lcg.com.
We sincerely apologize for the inconvenience this has caused.
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