21 October 2019, AtoZMarkets – The AFX Market liquidation process is getting worse by each announcement. Except for the investor compensation fund, there is little to none good news for the AFX Markets investors.
AFX Markets Special administrators have shared their report publicly. Numbers scream: “How could this happen?”
AFX Markets missing funds
According to the special administrators’ report, AFX Markets UK held £7.8 million worth of funds for 1,025 live customers. However, according to the FCA notice, AFX Markets only held £458,697 in their UK bank. As a result, there is as much as £7.3 million deficit.
Although AFX Markets in the UK is a part of the AFX Markets (Capital) in Cyprus, the special administrators could not get any valuable information from CySEC. This is due to CySEC’s own investigation of the company. Earlier, CySEC also suspended AFX Capital CIF license due to client fund mishandling.
AFX Markets Special administration objectives
As a part of their investigation, Jonathan Elman Avery-Gee and Daniel Mark Richardson of CG Recovery Limited announced their objectives as the following:
- To ensure the return of client money as soon as practicable;
- To ensure timely engagement with market infrastructure bodies and the Authorities;
- Either (a) rescue the Company as a going concern, or (b) to wind it up in the best interests of creditors.
Additionally, special administrators note that there is a significant difference between the official number of live accounts holding clients and client complaints. This in itself also widens up the missing funds' gap. Company directors' balances showed 316 clients with “Nil” balance, but in fact, these clients have funded accounts. The Gap difference is there for EUR 3.884.160,77
However, if you are a former AFX Markets (UK) you can approach the FSCS for the investor compensation fund. Each AFX Market investor could be eligible for up to £85.000.
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Liquidation case and the next steps
The liquidation case has a number of missing points. As an example, it is still unclear how much Swissquote holds in AFX Markets clients' funds. It appears that AFX Markets (UK) was transmitting clients to AFX Capital in Cyprus and in return Cyprus entity was using Swissquote as its LP.
Jonathan Elman Avery-Gee and Daniel Mark Richardson of CG Recovery Limited announced that there will be a meeting of clients and creditors on the 5th of November 2019.
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