The saga around the client money deficit at FCA regulated LQD Markets is likely to conclude soon after a number of setbacks and unexpected client funds deficits have been identified. The brokerage filed for bankruptcy protection after the Swiss National Bank turmoil in January and its special administrators have identified substantial amounts missing from the company.
While the brokerage was on the verge of being saved, another setback allegedly related to a technical issue has caused a massive loss which abruptly put an end to negotiations with prospective investors.
The special administrators appointed on the case of LQD Markets from Baker Tilly have established that a total of 396 clients have client money claims totaling almost $4 million. At the same time, the bankruptcy proceedings established a deficit of client funds totaling almost $2.8 million back in March.
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Half a year after clients have been asked to submit their claims to the special administrators, the endgame is near as the UK Financial Services Compensation Scheme (FSCS) is stepping in to reimburse customers of the failed broker.
The process has been additionally delayed after the initial proposal made by Baker Tilly for handling the bankruptcy was rejected by creditors with £826 worth of votes. The setback was eliminated after a second vote was called.
Currently, clients of LQD Markets are awaiting for the FSCS to contact them after an initial confirmation of client money claims has been concluded with the special administrator. According to an announcement made by the deposit insurance scheme, those clients who fall under the guaranteed amount of £50,000 will be contacted shortly.
Clients who have been holding balances larger than £50,000 at the brokerage are unlikely to recover any additional funds due to the massive gap in the client money pool. The latest special administrator’s report states that no progress on recovering post-SNB negative balances has been made.