The adversary proceedings against AFX Capital Markets Ltd, AFX Capital U.S. Corp., and STO Super Trading Online have been marred by delays, with the lawsuit to be protracted even further, as indicated by the latest documents filed with the New York Eastern Bankruptcy Court.

The adjourned Pre-Trial Conferences in the adversary proceedings, scheduled for December 9, 2021, before the Honorable Elizabeth S. Stong have been adjourned to January 25, 2022.

The adjournment notice was filed by Ronald J. Friedman, Esq., the liquidating trustee of Gallant Capital Markets. Back in June, he said that he had disbursed a distribution to Class 2 Claimants and was the process of enforcing three overseas judgments in the United Kingdom, the Cayman Islands and New Zealand. Furthermore, the Trustee said he was monitoring the status of the AFX Adversary Proceeding to determine if any funds would be available for this estate.

The rescheduling of the proceedings for January marks yet another delay in the case brought against AFX Capital by Gallant Capital Markets back in April 2018.

The Complaint alleges that in 2015 and 2016, Gallant Capital Markets deposited about $2.35 million into a Gallant account maintained at AFX. About two weeks before Gallant commenced its bankruptcy case, there was a balance of approximately $2.4 million in the Gallant account at AFX. Back then, Gallant requested several times that AFX returned Gallant’s funds. These requests, however, were disregarded.

The complaint further alleges that AFX withdrew the remaining balance, lacking any authorization and without any basis, in violation of the automatic stay.

In these adversary proceedings brought by Gallant’s Chapter 11 Trustee, the Trustee seeks a turnover of Gallant property and recovery of assets of the Gallant estate.

Back in September 2019, the Chapter 11 trustee filed a motion for sanctions, arguing that the AFX defendants have engaged in a manipulative strategy of delay, obfuscation, and fabrication in failing to comply with a stipulation of settlement.

Ever since, however, this motion has been pending. A number of hearings have passed without the defendant appearing in Court.

But while there are no positive news on the AFX matter in the United States, the UK authorities have taken some meaningful action to compensate the victims of AFX Markets Ltd.

The UK Financial Services Compensation Scheme (FSCS) has provided instructions to AFX Markets’ customers who are seeking compensation. FSCS is now officially open to claims from customers who invested with AFX Markets Ltd. Working closely with the Joint Special Administrators (JSAs) from CG&Co, FSCS has agreed on a process with the JSAs to review customer claims and pay compensation on eligible claims.

FSCS protection does not extend to claims against AFX Capital Markets Ltd, a Cyprus-based entity which is regulated by the Cyprus Securities and Exchange Commission (CySEC).