FNG Exclusive … FNG has learned that the management and shareholders of Swiss neobank/neobroker FlowBank are planning on taking legal action against the country’s financial regulator FINMA, to oppose the forced bankruptcy and liquidation of the company.

Two weeks ago, FINMA announced that it was removing FlowBank’s bank license and effectively shutting down the company, stating that FlowBank no longer had the minimum capital required for its business operations, with fears that the bank is over-indebted.

FlowBank’s controlling shareholders, led by founder and CEO Charles-Henri Sabet, have apparently engaged the services of Thomas Borer, a former Ambassador of Switzerland to Germany, who now runs strategic consulting firm Dr. Borer Consulting. (Crypto investment firm CoinShares is also a major backer of FlowBank, and has already indicated it will take an impairment charge of more than £21 million to write off its FlowBank investment). The group plans to look at “all necessary legal avenues to challenge FINMA’s decision,” in order to protect shareholders’ rights.

The group apparently claims that FINMA’s decision was erroneous and that FlowBank indeed had the required levels of capital to operate and maintain its Swiss bank license.

Even if FlowBank’s shareholder and management group were successful in sort of legal action, it likely won’t save FlowBank, as the company is already in the process of being liquidated by Walder Wyss Ltd, appointed by FINMA. All client CFD positions were already closed, and the liquidators are currently working on the payment of secured deposits “as soon as possible.”

In the meantime, FINMA and the liquidators are now reporting that “fraudulent people” are trying to take advantage of the situation by pretending to be FlowBank SA in liquidation, contacting (now former) FlowBank clients, mainly by email, and stating that accounts are now open and that transfers are once again possible. The regulator and liquidators stressed that any request for payment in exchange for a refund is fraudulent and should not be acted upon. They also advise anyone who receives such a message not to click on any links or open any attachments contained in such e-mails.

Through Dr. Borer Consulting, the shareholders issued the following press statement (translated from the original statement in French, which also follows the English translation below):

Press Statement – ​​FlowB Holding Switzerland AG

The majority shareholder of FlowBank SA (FlowBank), FlowB Holding Switzerland AG, strongly condemns the decision of the Swiss Financial Market Supervisory Authority (FINMA) to open bankruptcy proceedings against FlowBank.

This decision has no basis in fact. While claiming that FlowBank no longer has the required minimum capital, FINMA is silent on the fact that all the funds required to meet all applicable requirements have been deposited by the undersigned shareholder in a deposit account opened with a Swiss bank, pending FINMA’s approval of the corresponding capital increase. Instead of approving the capital increase decided by the bank’s shareholders, FINMA issued a bankruptcy decision on the basis of an alleged lack of capital that was in fact non-existent.

FINMA’s decision violates the rights of FlowBank and its shareholders. It causes considerable harm. FlowB Holding Switzerland intends to take all necessary procedures to ensure that its rights are respected.

Charles-Henri Sabet, member of the Board of Directors of FlowB Holding Switzerland AG, said: “This decision condemns an innovative and growing bank, whose business was profitable and which was known and appreciated by thousands of clients and partners in Switzerland and abroad. We have a special thought for the 147 employees of the bank, to whom we send our most sincere thanks for their unwavering commitment, as well as to our 22,000 customers, to whom we thank for their trust.”

Press Statement – ​​FlowB Holding Switzerland AG

L’actionnaire majoritaire de FlowBank SA (FlowBank), FlowB Holding Switzerland AG, s’élève avec la plus grande fermeté contre la décision de l’Autorité fédérale de surveillance des marchés financiers (FINMA) d’ouvrir une procédure de faillite à l’encontre de FlowBank.

Cette décision ne repose sur aucun fondement en fait. Alors qu’elle prétend que FlowBank ne disposerait plus des fonds propres minimaux exigés, la FINMA passe sous silence le fait que l’intégralité des fonds nécessaires au respect de toutes les exigences applicables a été déposée par l’actionnaire soussigné, sur un compte de consignation ouvert auprès d’une banque suisse, dans l’attente de l’approbation par la FINMA de l’augmentation de capital correspondante. Au lieu d’approuver l’augmentation de capital décidée par l’actionnariat de la banque, la FINMA a rendu une décision de faillite sur la base d’une insuffisance alléguée de fonds propres qui était en réalité inexistante.

La décision de la FINMA constitue une violation des droits de FlowBank et de ses actionnaires. Elle cause un préjudice considérable. FlowB Holding Switzerland entend intenter toutes les procédures nécessaires pour obtenir le respect de ses droits.

Charles-Henri Sabet, membre du conseil d’administration de FlowB Holding Switzerland AG, a déclaré: “Cette décision condamne une banque innovante en pleine croissance, dont l’activité était profitable et qui était connue et appréciée par des milliers de clients et partenaires en Suisse comme à l’étranger. Nous avons une pensée particulière pour les 147 collaborateurs de la banque, auquel nous adressons nos remerciements les plus sincères pour leur engagement sans faille, ainsi qu’à nos 22’000 clients, que nous remercions pour leur confiance.”

We will continue to follow this story as it develops.