The Vanuatu-regulated entity of Union Standard International Group (USGFX) informed its clients on Friday that it will be unable to refund all the stuck client funds within the previously decided deadline of the end of 2020.
The brokerage pointed out the restrictions imposed by the regulator on business as the reason for the delay.
“USG has been working very hard to process the withdrawals, but unfortunately this has proven to be a slower process than initially anticipated due to the restrictions put in place by the regulator,” the announcement stated.
“It is now apparent that not all clients will receive their full withdrawal amount by the previously stated target of the end of the year.”
Though it was not clear from the press release whether the Vanuatu-regulated entity of the brokerage is in trouble, USGFX confirmed to Finance Magnates that these funds are related to its troubled Australian entity.
“USG as a group is dedicated to our efforts in dealing with USG AU liquidation situation, and there’s no trouble in USG Vanuatu,” a USGFX spokesperson told Finance Magnates.
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Additionally, the brokerage detailed that many of its clients from the Australian entity were transferred to the Vanuatu entity and the latest announcement for the refund was addressed to them.
“Many of our Vanuatu clients were transferred from USGFX AU. Some of them still have money held by BRI and ASIC. To respond to their loyalty and confidence in us, we’re making spontaneous statements to let them know the liquidation process,” the spokesperson added.
Troubles in Australia
Earlier this year, the Australian subsidiary of the USGFX Group entered into liquidation with the appointment of BRI Ferrier as the liquidator. That followed the cancellation of the broker’s Australian Financial Services (AFS) license.
Moreover, the liquidator alleged that the shareholders of the brokerage were prevented from ‘dealing with the Company’s affairs and investigating its financial position.’
USGFX’s latest announcement further detailed that over 50 percent of its clients’ withdrawals have been processed.
“Although the vast majority of clients will receive their funds sooner, USG now expects to have returned 100% of the funds by the end of March, at the latest,” the brokerage noted.