The Fortress Prime scandal continues: FinanceFeeds digs deep and continues investigation

Editor’s note: FinanceFeeds had an advertising and media partnership contract with Fortress Prime. During the period of the contract, the agreement was the subject of defaults. After the defaults, the website of Fortress Prime went offline. This is indeed industry news and therefore was reported accordingly. In our continued quest to work according to the  journalistic […]

Fortress-Dubai-Prime

Editor’s note: FinanceFeeds had an advertising and media partnership contract with Fortress Prime. During the period of the contract, the agreement was the subject of defaults. After the defaults, the website of Fortress Prime went offline. This is indeed industry news and therefore was reported accordingly. In our continued quest to work according to the  journalistic code of ethics it is our duty to make this known.

Yesterday evening, FinanceFeeds broke the news that Fortress Prime has now taken its website offline, signaling the end of the road for the UAE-based ‘prime brokerage’ which has been at the forefront of industry news for almost a year.

Revelations such as one of its senior directors being wanted by the FBI for fraud and Interpol, and prolonged non-payment of withdrawals despite being alleged that they are very well funded, have the industry scratching their heads wondering how the firm continues to operate under another brand www.fortressdubai.com.

FinanceFeeds has made several attempts during the course of today to establish contact with members of the firm’s senior executives in order to provide official comment with regard to the fact that the business is still ongoing under the name of Fortress Dubai.

Moreover, to allow comment on the fact that Mr. Hamed Mokhtar (also known as Hamed El-Barki), wanted by the FBI for an alleged involvement in a US$2 million mortgage-related fraud, continues to serve as Managing Director at Fortress Capital Investments LLC despite an official statement that he stepped down.

Fortress Capital Investments LLC, the registered entity behind Fortress Prime and Fortress Dubai; have chosen to ignore contact from FinanceFeeds and after abruptly ending phone calls, stopped answering telephones after lunch time GMT. FinanceFeeds will continue to pursue comment directly as well as through local journalists.

Alongside many other media sources and third party suppliers, FinanceFeeds had a media partnership contract with Fortress Prime which has also been the subject of defaults.

What is the connection between Fortress Prime and Fortress Dubai.?

Investigations by FinanceFeeds have been able to establish that, far from closing and winding down the operations of Fortress Prime, the brand’s owner. Fortress Capital Investments LLC has simply taken the website of Fortress Prime offline, and kept the whole entity going under a new website, Fortress Dubai.

Although masquerading as a private equity arm of Fortress Capital LLC, the listing for the team on Fortress Dubai’s website is empty, however; calls to Fortress Dubai requesting staff members known to be associated with FortressPrime confirmed they are the same. A reference to Sheikh Mohamed Bin Sultan Bin Hamdan Al Nahyan is also made, who was constantly referred to by Fortress Prime during its existence.

The company’s Vanguard private equity fund claims to “invest its shareholders’ capital in the equity of private companies mostly in UAE and its surplus cash awaiting investment in trade and bridge finance” a statement which denotes the flush cash status of the company.

Fortress Dubai shares the same address and contact details as the former Fortress Prime.

It has been widely reported, and our sources can confirm, that many clients have not received their funds with amounts outstanding into the millions. What happened to the money? Where are the funds?

As far as research into the whereabouts of funds is concerned, Fortress Capital LLC and its owners have substantial wealth, and albeit owing monies to investors and service providers; the company we have been told is not in dire financial straits.

In February 2016, Fortress Prime claimed that it was in the process of obtaining a round of funding amounting to $200 million from the UAE Royal Family. Indeed, this never materialized, and the outlook for Fortress Prime was bleak.

Various contrasting reports were made by many media sources over the last few months, some stating that Fortress Capital LLC was to wind down Fortress Prime, and others stating that Fortress Prime was to begin processing withdrawals, with Fortress Prime placing the blame not on any difficulties regarding its cash position, but on administrative glitches.

In late February this year, Nidal Abdelhadi joined Fortress Prime as Executive Manager, however this was long after several months of non-payment to corporate and retail clients (yes, Fortress Prime is a Prime Brokerage, yet it onboards direct retail clients).

Mr. Adelhadi joined Fortress Prime from Swissquote – a very stable, highly advanced Swiss company. There is very little reason that someone with an already very good career would join a failing company -which adds to the claims that the company is able to walk away from losses on the Fortress Prime side able to continue with it’s now core business Fortress Dubai.

Indeed, the media reports that have varied so much are not the fault of the media outlets – more that Fortress Prime and its owners, Fortress Capital Investments LLC have created a smokescreen. Indeed, Mr Bashar Al-Masayba, who has now come forward on many sites as the person to contact about the whereabouts of withdrawals, is receiving emails not to any corporate email address, but when FinanceFeeds contacted a clerk at the firm last week, a personal email address was provided.

It seems clear that the company and its owners are well funded entities, and despite many reports that withdrawals were about to be processed, the company has held its line.

Considering the website was taken offline, when, if at all, does Fortress Prime considering settling outstanding clients and service providers’ accounts?

It is clear that Fortress Capital Investments LLC have absolutely no intention of settling any client withdrawals or paying what is owed to their broker partners or liquidity providers. It is however, clear that Fortress Capital Investments LLC will continue operating under the brand of Fortress Dubai.

Are they in liquidation?

By definition, liquidation means that a firm whose debts and monthly commitments outweigh its monthly revenues therefore being unable to service obligations, hence requiring the liquidation of assets to attempt to pay back what is owed.

In the case of Fortress Prime, this is clearly not the case. It is understood that the company simply created an intentional means of stemming the outflow of funds.

As pointed out in FinanceFeeds report, the company’s most recent action involves the shutting down of Fortress Prime’s website, but the same company has another website and just continues to operate under the name Fortress Dubai.

What is Hamed Mokhtar’s role in Fortress Capital Investments LLC?

Clearly, according to documentation that has been received by FinanceFeeds, dated February 3, Hamed Mokhtar (also known as Hamed El-Barki), a convicted felon who has an outstanding warrant for arrest by the FBI, is still in a very senior executive role in the company.

FinanceFeeds has it in writing that Hamed Mokhtar left the company to deal with his arrest warrants in the USA. However, since then FinanceFeeds received additional documented evidence that he is still Managing Director of Fortress Capital Investment LLC. The company ignored all requests to justify or clarify this.

This is only important due to the fact that a company that deals with investments and holds client monies as custodians has at the helm, a leader (Managing Director) that has in the past defrauded investors and yet to face justice. Additionally, considering the above, this leads investors to come to conclusions that it may be possible that running seems an easier option than that of facing the problem and either solving or going through more traditional and legal channels such as going into receivership.

All Fortress Prime employees now at Fortress Dubai Operations

FinanceFeeds understands the ‘winding down’ of Fortress Prime is purely a smoke and mirrors exercise in which customers will be told that the firm has gone into receivership and they can kiss their money goodbye, when in reality, the entire closing of the website represents no more than just that – a closing of the website. The operational structure of the firm remains, but under a different site, retaining all staff and management.

What is the involvement of His Highness Sheikh Mohamed Bin Sultan Bin Hamdan Al Nahyan who’s listed as Chairman of the Board of Fortress Capital Investment LLC? Is he a full shareholder?

Fortress Prime has made a very high profile issue of the supposed involvement of Sheikh Mohamed Bin Sultan Bin Hamdan Al Nahyan in the firm, when the reality is that any Royal ownership represents less than 2% of all company stock as first reported by FinanceMagnates.

FinanceFeeds is committed to continual research and reporting of this matter, and is preparing, alongside authorities and journalist in the UAE, to ensure that the reporting continues.

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