IKON Finance has successfully defended in the UK High Court against a $370 million claim. The event marks a second defeat for the claimants this year.
The firm was under attack by two companies which alleged to have been defrauded. The claims of Simetra Global Assets and Richcroft Investments have been voided. The judge on the case, Justice Knowles said in the judgement that “the evidence at the trial presented a very confused and incomplete picture”.
Both claimant companies have been controlled by Litinas Ionnis, a well-known Greek fraudster. Earlier this year a court case brought against IKON Global Markets in the US was struck down.
New Management Team
After the FCA started its deep sweep of the foreign exchange and CFDs industry in 2016, it executed a number of reviews of regulated firms. The lack of sufficient anti-money laundering (AML) procedures at a number companies forced the regulator to act.
Many firms were visited by the UK regulator for thematic reviews. A lot of companies were guided to implement better procedures to mitigate risks for clients and the companies. The FCA’s action at the time prompted IKON Finance to recruit a brand new management team.
The new management team which includes Adam Dougall and Richard Parkhouse as Directors. IKON Finance has implemented procedural changes to address some concerns pointed out by the FCA back in 2017 and is preparing to re-enter the FX market.
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The successful implementation of changes led to the official removal removal of the FCA’s VREQ requirement in September. IKON Finance is preparing to return to the market and focus on professional and institutional clients in the coming months.
Judgment Against Plaintiffs
The judgment handed down by the High Court on 9 October 2018 included statements made by Justice Knowles outline that the case appeared to him as “a little more than an elaborate and expensive, unmeritorious and now unsuccessful, attempt to throw off [the Claimants] responsibility onto the shoulders of [IKON Finance and others].”
The plaintiffs focused on confirmations of certain demo account balances which were provided to them. The move by the claimants focused on passing on responsibility for the losses of the companies of George Daskaleas to the brokerage firm.
Demo Account Balances
The claimants went to court with their demo account balances and maintained that they understood those represented real money. They alleged that IKON and other parties to the case were liable for dishonest assistance in breaches of fiduciary duty and trust.
Justice Knowles ruled that the allegations “fail in every material respect”. He concluded that there was ‘no dishonesty on the part of’ [the defendants]. He also elaborated that there was no deceit by them and they were not conspirators with other unrepresented defendants or between themselves.
Commenting on the judgment and reflecting on the lifting of the VREQ, a spokesperson for Ikon Finance Ltd said: “We have always maintained the claims brought against the company were without merit and groundless and we are pleased that this view has been reflected by the High Court judgment.”
“We look forward to focussing our attention back on our business as we re-enter the online CFD, FX and Commodities trading market for institutional and professional clients,” the spokesperson elaborated.