GCM Prime has sent an email to clients asking them to halt trading and close their existing positions, Finance Magnates has learned. The company outlined in the statement that after an evaluation of its business it is reorganizing the company.
Clients of the company are expected to wind down their positions in the near future.
“While no official date has been set, and we will continue to be as accommodating as possible for our clients, we expect positions to be wound down in the next 30 days,” commented the CEO of the company Adam Toro to Finance Magnates.
Recent quarters have been difficult for the firm as it was forced to highlight that it is not affiliated in any way with the bankrupt Gallant Capital Markets.
“GCM Prime is an independent FCA regulated company. Gallant Capital Markets, an FSC registered company, voluntarily filed for Chapter 11 reorganization and has no effect on GCM Prime. GCM Prime was not acquired by Gallant nor does it share a similar management structure,” the company’s management highlighted in a statement in April.
In May the company posted its financial results for 2016, outlining revenues of £1.5 million between April and December last year.
Clients of GCM Prime have been advised by the company to find new counterparts for executing their trades.
The letter sent out to clients outlines: “Regrettably, some recent industry events and the corresponding misinformation disseminated by a number of market participants has negatively impacted our firm’s relationship with a number of its key institutional clients as well as our liquidity providers.”
“Despite the fact that GCM Prime was at the time, and remains, an independent and solvent regulated company, the conditions surrounding these circumstances have made it difficult to grow the business or compete in the hyper competitive tier 2 space. As a result, ownership has decided the most prudent thing to do at this time is to cease trading activity and reassess how best to grow the business moving forward,” the letter concludes.