US Counsel for AFX Capital unable to reach firm, cannot get money owed

Maria Nikolova

Foley & Lardner LLP, counsel for AFX Capital Markets Ltd., AFX Capital U.S. Corp. and STO Super Trading Online, has received no response to numerous requests over the last two months.

FinanceFeeds has been keeping its readers informed about the latest developments in the adversary proceedings taken against AFX Capital and STO Super Trading Online as a part of the Gallant Capital Markets bankruptcy case in New York. It appears that there are some serious frictions between the defendants and their legal counsel – this becomes apparent from a document submitted at the New York Eastern Bankruptcy Court on Thursday, October 18th.

Douglas E Spelfogel, a member of the law firm of Foley & Lardner LLP, counsel for defendants AFX Capital Markets Ltd., AFX Capital U.S. Corp. and STO Super Trading Online in the adversary proceedings, seeks entry of an order to withdraw as counsel for the AFX Parties.

“Among other things, the AFX Parties have not paid for significant legal services rendered to them and Foley has received no response to numerous requests over the last two months with respect to the same and with respect to matters arising in the Adversary Proceeding generally”, the counsel says.

Foley not only has substantial unpaid invoices with no assurances of or plan for repayment, but has been unable to communicate with the AFX Parties in any capacity.

Foley’s client contact for the AFX Parties is Mario Persichino who is a resident of Dubai and is a representative of defendant AFX Capital Markets Ltd. whose principal place of business is in Cyprus. Accordingly, most communications have been via email, Mr Spelfogel explains. Most recently, on October 9, 2018, Foley advised the AFX Parties by email that if it did not receive an immediate response it would be forced to withdraw as counsel in this matter. Foley has yet to receive any response from the AFX Parties.

Let’s recall that, under the Complaint against AFX, throughout 2015 and 2016, Gallant deposited approximately $2.35 million (for its benefit) into a Gallant account maintained at AFX. Within the two-week period prior to Gallant’s commencement of its bankruptcy case, there was a balance of approximately $2.4 million in the Gallant account at AFX. Around that time, Gallant made multiple demands upon Defendants for the turnover of Gallant’s funds—all of which were disregarded.

Nevertheless, AFX withdrew the remaining balance, without authorization and without basis, on the Filing Date—in violation of the automatic stay. This case involves core issues whereby the Trustee is seeking a turnover of Gallant property and recovery of assets of the Gallant estate, and enforcement of the automatic stay.

The case is captioned Duval v. AFX Capital Markets Ltd. et al (1:18-ap-01038).

Read this next

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

Retail FX

Interactive Brokers’ traders now have direct access to TradingView

Professional charting and trading platform, TradingView has integrated the US-listed brokerage firm Interactive Brokers as the latest online trading partner.

Digital Assets

This Web3 infrastructure provider is on the verge of a radical upgrade

The crypto industry fueled the anticipation of the arrival of web3 with the introduction of Decentralized Finance, Metaverse, and more. And today, that web3 is finding support from various developers looking to build and develop the space to extract the most benefits out of it.

Digital Assets

Crypto bots: trading assistant 

The cryptocurrency market is a volatile one, with huge gains and dramatic dips. However, the most informed traders can use automated tools to maximize profits while minimizing risks. 

Retail FX

Cryptos Seed Review – What Makes This Broker Stand Out (2022)

Read our Cryptos Seed review today to learn all you need to know about Cryptos Seed before signing up with the broker(cryptos-seed.com) – by Finance Feeds.

Institutional FX

Citadel goes live with FX NDFs trades on LCH ForexClear

“This builds on the strong growth at the service, which has historically been driven by a focus on margin efficiencies that will only increase with Phase 6 of the uncleared margin rules in September 2022.”

Digital Assets

Crypto platform Bitfrost registers as VASP in Gibraltar ahead of DLT License

“We’re now looking at the next steps necessary to obtain authorisation to operate as a fully regulated DLT or Virtual Asset Service Provider.”

<