CEO witness reveals Prime Companies bankruptcy insights

12 February,, Amsterdam — Following the bankruptcy of Prime Companies; BT Prime and Boston Prime, back on January 26th 2015, respectively the liquidity providers of Boston Technologies. The firm has been undergoing harsh procedures, resulting into an abundance of uncertainties about the entire situation. Adding to the case, past week a number of Boston Technologies employees were sacked, rumored to be working adjacent with the firm’s liquidity providers; BT Prime and Boston Prime. Concertedly with the unrevealed missing client funds, the case is becoming more aggravated in the eyes of the unsettled customers of BT Prime and Boston Prime.

In recent light, additional knowledge and essential materials have been emerged, providing more insight upon the concern. Yet, will it entail significant details for the startled clients of BT Prime and Boston Prime?

Highlights of the Written Legal Statement

As the former the CEO of Boston Technologies and later on the Forexware LLC’s Head of Strategy, Mr. G. Popescu has filed in court several documentations, including an elaborate written witness statement. In summary, the affidavit of the former CEO of Boston Technologies clarifies the procedures prior the bankruptcy announcement;

1. Unfinished merger

Concerning the Prime Companies bankruptcy, it appears that the sale of the Prime Companies to Forexware, consisting of the unregulated BT Prime, FCA regulated Boston Prime and Boston Technologies, was not even finalized until present-day. Limiting the possibility for former Boston Technologies CEO, Mr. G. Popescu to assess the financial and management information properly.

2. Impact of the SNB announcement

In conjunction with the SNB debacle and the little information over the company, Mr. G. Popescu found himself in a delicate situation. Since he was not being able to ascertain what exact impact the incident had on the firm, only knowing that it greatly destabilized the company.

3. Lack of inherent risk transparency

It is inherent that brokers need to have a policy in place where it advocates “risk transparent” communications between its customers. During that phase, Mr. G. Popescu commented that there was none of these practices in place, resulting even in cases where customers were disputing rates, eventually putting the firm into a horrid position between Forexware.

4. Adding concerns 

Around the January 22nd 2015, there were concerns signaled by former employees of the Prime companies, who were already working under Forexware at that moment, reporting that there were alarming solvency issues. Together with additional supplied financial resources, Mr. G. Popescu came to the conclusion that the liabilities of the Prime Companies were amounted to US$15 – 16 million in client funds gap.

5. Innate declaration of insolvency

Right after he drew his conclusion, Mr. G. Popescu took immediate action by contacting a FCA official on the 25th of January, explaining his concerns. With immediate course, the right steps were taken in order to put the business on hold. By the morning of January 26th 2015, an official insolvency announcement was in enacted on the websites of the Prime Companies and effectively on January 30th 2015, the VREQ was established, resulting the Prime Companies to successfully freeze their bank accounts as well as to put their position to trade on hold.

6. Application for special administration

Without further due, Mr. G. Popescu's aim is put the Prime Companies under direct special administration, as he urgently suggest this in his witness statement: “A crisis point has been reached. In order to protect client assets, customers and creditors, the Company’s affairs need to be taken over as soon as is practicable by a special administrator.”
 Furthermore, he suggested that Michael David Rollings and Steven Edward Butt of Rollings Oliver LLP should be appointed as special administrators of the Prime Companies case.” 

From the written witness statement various conclusions can be derived, foremost it is clear that Mr. G. Popescu acted properly over the period of the Forexware merging proceedings, since crucial financial and management information were withhold from him, leveraging the former Boston Technologies CEO without the tools to take proper action. However, Mr. G. Popescu should also be questioned upon the fact that he took a dilute approach for retrieving the crucial financial and management information. Why didn’t he press more for these valuable and indispensible materials?

In terms for the concerning customers, Mr. G. Popescu reported the following, in the official witness statement: “As matters stand, on the information that I have received from Forexware, I believe that the Company holds US$900,344.49 of “client assets”, as such term is used by the FCA. All of those assets are, in fact, client money. However, the client asset situation will require further investigation following the appointment of any special administrators.”

Source: Written Legal Statement of George Popescu

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