Dubai headquartered brokerage Fortress Prime has issued a press release announcing that it is raising an additional $200 million in funding. The move is aiming to alleviate the serious concerns of clients of the company, some of which have been waiting for their withdrawal requests to be honored for a couple of months now.
It’s curious to see how a company that hasn’t been able to honor a couple of millions worth of client withdrawal requests will be able to raise $200 million from shareholders.
speculation about Fortress Prime will only be over after client withdrawal requests are honored
While on the surface the PR announcement sounds reassuring, the speculation about the issues which Fortress Prime is facing will only be alleviated after facing the ultimate test – the successful disbursement of client withdrawal requests.
New client funds release deadline
Finance Magnates reporters have learned that during the past couple of days, a number of clients of Fortress Prime have been informed that their funds will be disbursed by the 15th of November. The company’s announcement states that the capital injection will help the brokerage to “get back on track” after the withdrawal issues have hit its credibility.
According to some of the company’s clients, they have continually been reassured that their funds would be released soon and this last deadline coupled with today’s announcement make up the final opportunity for Fortress Prime to rectify its situation, although not necessarily regain credibility.
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The company has not been supervised by any financial regulatory authority and has been operating for a little more than a year.
AML issues for a Royal family backed firm in Dubai?
The funds of the clients of Fortress Prime have allegedly been frozen due to anti-money laundering (AML) issues. Earlier this month, rumors about a pending acquisition to be made by the brokerage have appeared to be far fetched due to the operational issues the company has been facing.
Some of the institutional clients of the company have been awaiting the release of their funds for several weeks. The credibility of the management and the owners of the firm have suffered enough to cause industry insiders to question the solvency of Fortress Prime.
The board of the company appointed a new senior executive, Moustafa Gamaledine, who stated in the PR: “We are rectifying our credit issue with stronger than normal underwriting guidelines in this lucrative industry and taking a more stringent approach to credit default management.”
“As far as our operational issues are concerned we are implementing some key organizational restructuring that will be critical in eliminating current AML and cash management issues effectively diminishing any kinks in Fortress Prime’s armor,” he concludes.
As far as industry insiders are concerned, these words coming from a newly appointed executive whose name does not appear to yield any Google search results apart from the officially released PR will not be sufficient to alleviate their concerns. After several months of troubles for its clients, the clock for Fortress Prime to remain in business is ticking fast.