FNG Exclusive… FNG has learned that the liquidators of bankrupt Swiss neobroker FlowBank have issued an updated circular to creditors, indicating that (among other things) they are currently seeking a potential acquiror for the bank’s 100% holding in FCA regulated FX and CFDs broker London Capital Group Limited (better known in the business as LCG).

The liquidators, Swiss firm Walder Wyss, is separately looking to just shut down and discontinue the operation of LCG’s offshore business domiciled in the Bahamas, LCG Capital Markets Ltd, which also operated under the brand FlowBroker.

FlowBank was forced into bankruptcy by Swiss financial regulator FINMA in mid June, with FINMA stating at the time that FlowBank no longer had the minimum capital required for its business operations, with fears that the bank had become over-indebted.

FlowBank was established in 2020 by CEO Charles-Henri Sabet, who previously ran LCG. Crypto investments company CoinShares owned an approximate 30% minority interest in FlowBank. While the company’s initial mandate was to focus on banking and investment activities, more recently FlowBank reverted to its “LCG roots” and was seen mainly promoting online CFD trading.

LCG has been run the past few years by Dave Worsfold and Matt Basi. After being caught by surprise by what happened at FlowBank leading to a temporary license restriction imposed by the FCA, LCG restarted normal operations in early July. LCG has been operated for the past year as an introducing broker.

Back to FlowBank, the liquidator’s circular contained some other interesting information about the bankruptcy proceedings, including:

Payment of FlowBank secured deposits

Walder Wyss reported that at the opening of the bankruptcy, FlowBank had approximately 9,000 accounts holding secured deposits for a total amount of approximately CHF 53.5 million.

By August 23, 2024, the liquidators had repaid around 5,800 accounts for a total amount of approximately CHF 45.0 million, representing around 84% of the total amount of secured deposits. The process of reimbursing the secured deposits is continuing, although approximately 2,900 customers have still not claimed their secured deposits.

Charles-Henri Sabet’s paintings

The liquidators reported that a claim has been made by Charles-Henri Sabet, FlowBank’s CEO, in relation to several Pop Art era paintings located on the premises of FlowBank, including an original Andy Warhol. Specifically:

1. Roy Lichtenstein, Two Nudes (Nudes Series, C. 284)
2. Roy Lichtenstein, Seascape (Landscapes Series, G. 1252, C. 210)
3. Andy Warhol, Nine Dollars (Silkscreen, 22/35, 1982)

After examining the claims in question and the evidence provided, the liquidators consider that Mr. Sabet’s claim in relation to these paintings appears to be well-founded.