Full investigation into ACFX – We interview staff, former employees, and clients with balances ranging from $1,500 to over $80,000 as withdrawals remain outstanding and management leave the firm.
On April 7 this year, retail FX brokerage ACFX, an acronym for Atlas Capital, was the subject of a license suspension by Cypriot financial markets regulatory authority CySec. A generic rationale was provided in a public report by the regulator as to why this action was taken.
Indeed, CySec cited that the firm had failed to comply with certain regulatory provisions, however it was not specified as to what exactly they were.
Just over two months have now passed since this action was taken, a period during which FinanceFeeds has conducted an investigation into the company’s responsibilities towards its clients, and in particular, the processing of client withdrawals….
….or lack thereof.
Indeed, a litany of complaints surrounding this matter now adorn public forums, indicating that the tardiness with regard to withdrawals is no longer limited to Chinese introducing brokers and their clients, but is now widespread across many region in which ACFX conducted its business.
During this investigation, FinanceFeeds contacted several clients who allege that they have been affected by this, as well as made investigations into the operational structure at ACFX by contacting existing and former employees of the company.
One particular trader that we spoke to is an experienced trader who holds accounts with several brokerages in various regions, including Australia, Cyprus, UK and Belize and explained to FinanceFeeds that he has never had any issues until now.
“Things got slow with withdrawals when I won large amounts (some hundreds of thousands USD) off another Cyprus broker in August 2015, then again in January 2016. This coincided with China Black Monday and the oil price drop plus commodity currency drops. There were reports of this happening on greater scale with much bigger traders than me” said the trader
“Anyway all along I had an account manager at ACFX, Rasha Gad. It was apparently a surprise to all when on 7th April ACFX’s license got suspended by Cysec. The first thing I know is that all my trades turned “Close Only” on the Metatrader trading platform, as I was trying to roll over some of my positions at that time. I generally rolled over positions every day, but I did not use ACFX account to scalp – with very rare exceptions” he explained.
“My balance, once I had everything closed was almost $84,000, which was a significant proportion of my trading capital (and personal wealth)”
FinanceFeeds conducted some research and found the withdrawal delays in China were due to so-called instances of ‘riskless arbitrage’ which had started in approximately March. Further research showed delays in withdrawals from time to time in August 2015.
Another trader explained “My account with ACFX had been losing as I needed to to hedge various exposures in Australian Dollars and New Zealand Dollars and Turkish Lira from other investments. I also traded Euro, Swiss Francs, Yen, US Dollar and various crosses between all the mentioned currencies, long and short. I also traded just under a contract of Spot WTI Oil. I was not hedged here, it was an outright long. My account had been designated swap free since early to mid 2015.”
On July 9, FinanceFeeds received further reports from traders, one particular client of ACFX stating “I am client of ACFX, with a large sum in an account with them that I cannot withdraw, as my withdraw request is falling on deaf ears, along with thousands of others I’d say. I have written to Cysec with no response other than they are still investigating the situation.”
This has prevailed, and two days ago, a client on the Indian Subcontinent explained to FinanceFeeds “I am waiting for a withdrawal of $1379. I have made several requests to withdraw via email and the company did not answer. My initial deposit was made by Webmoney, and therefore in order to withdraw, ACFX stated that I needed to send an email to them to be able to receive funds back to my Webmoney wallet, but nothing has materialized.”
Many other customers, also based in the Indian subcontinent, which appears to be a region in which the company has a number of clients with account balances under $2,000, have approached FinanceFeeds in order to explain that they have been unable to receive withdrawals, many of whom have also supplied their account numbers and balance amounts.
Exodus of staff and senior management
Just after CySec suspended ACFX’s license, the company’s Chief Marketing Officer left the company, and Petar Gazivoda, the company’s CEO, has made himself unavailable and not replied to any calls to the company’s office or requests for contact via email contact with the company’s office to staff members that are still with the company.
In asking for comment from ACFX, FinanceFeeds approached Przemyslaw Czerka, the company’s Sales Manager, who replied:
“Glad to receive your message. However I won’t be able to comment at this moment as the company is still working with CySEC on this matter. Thank you and keep in touch. Best Regards, Przemyslaw.”
Andreas Michaelides, Head of Investment Research at ACFS (Atlas Captial Financial Services), replied to our investigation ” Thank you for reaching out to me. Unfortunately, I am not in a position to comment. Therefore, dutybound I will pass this message onto the company’s senior management. Kind regards Andreas.”
Former employees have come forward and explained to FinanceFeeds that there are not many members of staff remaining at the company, and that “The whole management team have now left, not just the Chief Marketing Officer.”
Another former employee explained “The management left a while ago, and regular staff have not been kept in the loop even before the suspension of the license by CySec. It is probably only Petar (CEO) who could say something relevant.”
Until now, silence remains.
After the suspension of the license by CySec, members of staff were under the impression that the limiting of withdrawals could be attributed the the company wanting to resolve its regulatory matter, however this is still ongoing.
A client of the firm explained “I have emailed the ACFX back office twice to ask to process my withdrawal on top of sending the request through for withdrawal through the ACFX back office portal on about the 9th of April.”
Further research shows the parent bank of ACFX Atlas Banka in some financial strife in Montenegro. One of the reasons that the company appeared safe was the bank backbone the brokerage had.
“ACFX was a good broker before the sudden suspension” said one client. “Their conditions were pretty good in that I could obtain a swap free account – positions were able to be held 1 week before a commission of 15 USD per contract per day was applied.”
“The spreads were pretty average but their rebate structures were quite generous and they paid promptly. It appears as though their marketing department (which is the part responsible for rebate payouts and bonus payouts) were the first to resign or be terminated” explained this particular client.
According to further research, one of the account managers at the firm thinks that the company paid out millions to the Chinese clients that had found the oil arbitrage trade I mentioned above. “It was such an obvious flaw that I am so surprised that they did not pick it until too late. it means also their cfd dealing desk was very unskilled and grossly underestimated the skill of traders internationally” said a client involved in this matter.
FinanceFeeds spoke to CySec about this matter, with a representative at the regulator preferring not to comment as this still subject to an ongoing regulatory investigation by CySec.
Photograph: Limassol Marina, Cyprus. Copyright FinanceFeeds#acfx, #cysec, #withdrawals