A further interesting development in the $100 million Ukrainian hacking and insider trading case was revealed today. The Maltese prime broker, EXANTE, says that due to the current charges by the American authorities some of its counterparties have not respected client fund transfer requests.
In an official blog post on a Russian forum, EXANTE says that it will provide the court with evidence on the 24 of August, 2015. At this meeting, the court will consider the requirements of the U.S Securities and Exchange Commission’s (SEC) restrictive measures on the company’s assets in the United States.
At the same time, EXANTE says that the SEC does not require any restrictions to be imposed on the company’s assets outside the United States. The company explained that despite this statement it still faces problems with counterparties outside the U.S, which it intends to resolve in court if necessary.
Exante has reiterated its claims that the SEC charges completely misrepresent its business model, as well as the regulatory conditions in which it operates as a prime broker licensed by the Malta Financial Services Authority. The firm stated once again that it has not acted as a hedge fund as was alleged in the complaint.
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Here is a translation of the most relevant parts of the company’s statement today:
“Unfortunately, in spite of the strict adherence to the requirements of MiFID for segregation of assets and the absence of any restrictions imposed by the regulator on the company’s assets outside the United States, some counterparties refuse to carry out operations to transfer funds to the bank accounts of EXANTE customers.
We believe their actions are illegal and are currently contesting these actions, including in the courts in Malta and in the UK. However, as a result of the unlawful actions of the banks as of August 18, 2015, execution of orders for transfer of funds and securities has been significantly hampered.”
“We look forward to restoring the functions of the counterparties, at the latest after August 25, 2015, ie after the lawsuit with the SEC in court. Up to this point, we will also continue to work with the banks in order to start the execution of payment orders as soon as possible.”