Multibank Group takes German partner Von Der Heydt Group to court

abdelaziz Fathi

MultiBank Group is suing Von der Heydt (VDH) Group over murky transactions in mutual funds undertaken by the German a private investment and real estate firm. The multi-regulated broker accuses VDH of fraud, breach of fiduciary duty and bad-faith dealings.

VDH was allegedly in breach of the European regulatory framework and Luxembourg regulations, MultiBank said.

For perspective, MultiBank Group entered into a joint venture project with VDH Group from 2017 to 2020. During this period, the company invested over €43 million based on representations made by VDH Group and its CEO, Michael Gollits.

MultiBank’s key claim is that VDH Group didn’t disclose that its trading and investment activities were unlawful and violated Luxembourg and German regulations. The business relationship has taken a turn for the worse in 2018 after German police raided the offices of a money manager in Berlin on suspicion of conspiracy to defraud investors.

Stephan Blohm, then the CEO of VDH Group in Luxembourg, was a main suspect and faced criminal charges for participating in a classic Ponzi scheme. Lawyers for some 3,000 investors, who paid nearly €300 million to the firm, filed criminal complaints seeking restitution.

Now, a complaint filed by MultiBank claims that VDH Group didn’t reveal “adverse findings” of the supervisory commission of the Financial Sector in Luxembourg (CSSF). Specifically, the watchdog referenced 12 “severe deficiencies in relation to the functioning of the Funds.” The lapses ranged from inability to provide the auditor with sufficient details about the company’s activities to assets misvaluation and lack of internal controls to prevent money laundering and terrorist financing.

As also ‎charged, Michael Gollits used VDH clients’ money on highly leveraged CFDs referencing precious metals which are banned under EC Law for certain investment funds. To create the illusion of stability, Gollits concealed large trading losses from investors and took commissions for VDH Group on his illegal trading which were paid out of clients’ money he invested, the statement further reads. Some of these funds eventually completed the circle back to him.

VDH and its operatives kept shifting their tactics as regulators and supervisors began to scrutinize their activity, issuing misleading explanations regarding the investments, until eventually the hidden realities come to light.

To preserve their credibility, MultiBank offered to pay German noteholders their funds which were diminished as a result of “unlawful actions” by Von der Heydt Group. The group, however, emphasizes that it has made the offer benevolently as it has no obligation to do so.

In a twist to the saga, VDH Group joined the plaintiffs in a lawsuit against a BVI-based subsidiary of MultiBank Group (MBFX). The latter described the move as a last-ditch attempt by VDH to distract their investors from their unlawful activities. The company referenced a recent judgment in the High Courts of the BVI, where a court found that Michael Gollits had told “untruths to the MultiBank Group about the illegal trading in the notes, deliberately lying about the illegality of the project.”

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<