USG Capital ISA Liquidation


9 May AtoZForex, Vilnius — On Sunday morning, the 8th of May, the Tel Aviv district court appointed a liquidator to USG capital based on an issued order. Owing to reports that USG Capital’s debts exceeded its assets. According to the court documents, it is suggested that the unforeseen USG Capital ISA liquidation was impacted by the earlier ISA charges on the broker’s algo trading operations.

On the 18th of April, the Tel Aviv court ruled that USG’s offering of algo trading services does not imply that the broker is providing investment advice. Despite, the Tel Aviv district court ruled against ISA in USG Capital’s algo trading case, the broker’s brand was damaged severely.

USG Capital ISA Liquidation inevitable?

A representative at USG Capital asserted that despite the temporary ruling USG capital has against the ISA (which allows them to make platform offerings that support algo trading while not being treated as portfolio management.), their reputation has been critically damaged.

The provisional order in the ISA algo trading case set a sensational precedent in a region where the financial regulator has been trying hard to fend off scams and other fraudulent activities such as the recent UTrade Ponzi scheme. Building further the USG legal representative commented:

“Since March the firm did not get any calls. Employees broke down and quit. It reaches a point where the company had no activity. No employees, no investments, no operations.”

USG Capital class action lawsuit charges

The lawyer indicated that USG capital was in oblivion as they had not received any updates or responses relating to their license application from the ISA. Investors who were interested in supporting the firm wanted to wait it out until the legal proceedings that were involved were concluded. USG capital persevered to continue operating in expectancy of a licensing decision which never materialized.

In December 2015, USG Capital was charged with a class action lawsuit in the amount of 70 million NIS on grounds of unlicensed investment related activities. The Global unit USG Capital Ltd. was also included in the lawsuit alongside the local firm as well as Atlantic Brokers (USG’s owner) and Tomer Sinai, a major shareholder in all the firms.

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