There’s been an update to the situation with GCM Prime Ltd, a prime of prime broker, which ceased trading in 2017, with the firm filing a solvency statement through the UK’s Companies House this Thursday.
In particular, the solvency statement, which was made last month by Levy David Benarroch, who is the current director of the company, said that the company is able to pay all of its financial debts.
“I, being the director of the Company for the time being, have formed the opinion, as regards the Company’s situation, that as at Thursday 26 September 2019 there are no grounds on which the Company could be found to be unable to pay (or otherwise discharge) its debts.”
When forming these opinions, the director had taken into account all of the company’s liabilities, including prospective and contingent liabilities, the statement filed through Companies House said.
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At the same time, another statement was filed regarding the reduction in issued shared capital. Specifically, on the same day, it was approved that the issued capital of the company will be reduced from £7,740,877 to £7,290,877 by the cancellation of 450,000 Ordinary shares of £1.00 each of the company.
GCM Prime closes its doors in 2017
As Finance Magnates reported, just a couple of years after launching operations, GCM Prime ceased trading after recording losses of over £3 million. In August of 2017, GCM Prime released a statement noting that it would be ceasing trading within a month.
Documents seen by Finance Magnates, suggest the company ceased its operations in September of 2017. So what happened to GCM Prime? The prime of prime broker’s issues can be traced back to the first few months of 2017 when Gallant Capital Markets, a retail broker known as GCMFX, filed for bankruptcy.
Despite its similar-sounding name, GCM Prime had no connection to GCMFX. Unfortunately, rumors spread across the industry that there was indeed a connection between the two firms and that GCM Prime would be negatively impacted by the broker’s bankruptcy filing. This ended up becoming a self-fulfilling prophecy for the firm.