Former ACFX management allegedly hired by LCG

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.

A litany of complaints surrounding this matter now adorn public forums, indicating that the tardiness with regard to withdrawal requests made by customers of ACFX is no longer limited to Chinese introducing brokers and their clients, but is now widespread across many region in which ACFX conducted its business.

The vast majority of the company’s senior management subsequently left the firm. FinanceFeeds recently interviewed staff, former employees, and clients with balances ranging from $1,500 to over $80,000 as withdrawals remain outstanding following the mass exodus from the firm by its management.

Today, FinanceFeeds has been in contact with sources close to the matter to establish the whereabouts of certain members of the senior management who were at ACFX, as they have, according to our sources, been hired by LCG, a company which has had a revolving door approach to senior management recruitment since it was acquired by GLIO led by Charles-Henri Sabet in 2014.

LCG hires former ACFX management as yet more LCG officials leave

This morning, one source very close to the matter explained to FinanceFeeds “LCG has recently hired the management that lead ACFX to bankruptcy. This will be the final blow for LCG.”

This comes following our report recently that a further exodus from LCG of senior management has taken place, with Legal Counsel Kate Valdar having gone on gardening leave recently, Peter Wells, who spent 28 years at British interdealer broker ICAP before joining LCG post-acquisition having left LCG to take time out from the city, Nicola Penn, the Executive Assistant to the Directors having moved on, and the firm shutting its LCG digital operations in Tel Aviv just 6 months after establishment.

One particular senior ACFX executive explained to FinanceFeeds:

“Please do continue your investigation and I hope you will do your job to the best standards and you will reveal who hurt ACFX and why those who did all went there (LCG). For now that’s it from my side.” [sic]

Today, FinanceFeeds contacted Andreas Michaelides, former Head of Investment Research at ACFS (Atlas Capital Financial Services division of ACFX) for his comments on the hiring of certain key ACFX staff by LCG, who said “I have nothing to add.”

FinanceFeeds has reached out to LCG’s legal department by telephone over the past few days in order to clarify this matter, however the firm did not provide comment, saying that they were not able to make any statement one way or another.

When contacting ACFX’s head office in Cyprus, a spokesperson explained “We are under license suspension at the moment and therefore I cannot answer any questions of this nature.”

Francois Nembrini joined LCG from FXCMPro where he was Managing Director of FXCM’s institutional division for 12 years, and Arman Tahmassebi joined LCG after 15 years as COO of IG Group, both of these executives are a bastion of sophistication and world renowned industry figures with extensive knowledge. They have both left after short periods, and Mr. Tahmassebi is now COO at ETX Capital, with Mr. Nembrini now leading Quantic AM, which is AFX Group’s institutional division.

During our investigation into the affairs of ACFX, FinanceFeeds contacted several clients who allege that they have been affected by the suspension of the firm’s license and subsequent exodus of all of the firm’s senior management. We also 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 that blighted ACFX 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.”

Senior ACFX management leaves, as do most of the staff

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.”

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.”

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.

However, it isn’t just the moribund ACFX that appears to be in the mire financially.

In the beginning of 2015, LCG’s losses ran at approximately £7 million for the first quarter, by the end of the year, had increased so much that the firm had made a £13.9 million loss for 2015.

In spite of such losses, LCG moved its operations from Devonshire Square in the heart of the City of London’s financial district to the highly exclusive 1 Knightsbridge in London’s West End, and underwent a rebrand, part of which involved the purchase of the LCG.com domain for $175,000.

Very few of the original senior executive team that were elected to their positions in 2014 post-acquisition are still with the company.