The Maltese criminal court issued an investigation and attachment orders against Exante yesterday for its alleged part in the $100 million Ukrainian hacking and insider trading case exposed by the American authorities two week ago.
Last week, the Maltese prime broker revealed that some of its counterparties had not respected client fund transfer requests. Exante said at the time that the U.S. Securities and Exchange Commission (SEC) does not require any restrictions to be imposed on the company’s assets outside the United States, therefore calling these non-U.S. counterparties’ actions illegal.
The prime brokerage turned to the local civil court asking it to rule against the Bank of Valletta (BOV), a Maltese institution, for freezing its client assets. The court was told that the BOV had frozen the accounts prior to the criminal court order. However, the bank explained that as soon as money laundering is suspected, it’s legally obliged to file a report within five days, during which time it must stop all transactions. Exante had to drop the case yesterday following the criminal court decision to open an investigation, requiring the funds to remain frozen.
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According to the SEC and FBI, dozens of traders from around the world, who all seem to be linked to a hub in Ukraine, illegally traded on insider information stolen by hackers from newswires. The traders sought to conceal their illicit activity by establishing multiple accounts in a variety of names, funneling money to the hackers as supposed payments for construction and building equipment, and trading in OTC products such as contracts for difference (CFDs).