Baker Tilly, the special administrators appointed at Liquid Markets (LQD Markets) – the UK Forex broker that was amid the first casualties of “Black Thursday” events, today issued the First Progress report on the case. The report covers the period from February 2, 2015 to August 1, 2015.
The First Progress report confirmed that there is a deficit on client money of $2.84 million, as earlier estimates by the special administrators have shown.
Commenting on the hole in funds, the Report states that:
“further investigations are being undertaken in relation on how the deficit on client monies has arisen as well as a full investigation into the transfer of the business assets from LQD Markets Limited in Cyprus (LQD CY) to the Company”.
Regarding the clients, the good piece of news for them arrived earlier this month, when the Financial Services Compensation Scheme (FSCS) confirmed all products once offered by LQD Markets were covered by the scheme and, therefore, all customers of these products were entitled to claim a compensation of up to GBP 50,000.
All those claims, however, should first be agreed with Baker Tilly. Until the moment of the release of the report, Baker Tilly have agreed 396 clients’ claims worth a total of $3.92 million.
Details of these claims have been sent to the FSCS and the body will be in touch with the claimants. The deficit on client money incurred will not affect disbursements under the FSCS.
LQD Markets held client money in omnibus accounts designated as client money at banks and clearing houses. As a result of the work of the special administrators, clients funds with a value of GBP 1.41 million were transferred to the Special Administrators’ accounts.
Regarding unsecured creditors, their group includes 223 introducing brokers with positive balances (in terms of commissions earned) at the moment when LQD Markets appointed the joint special administrators. The rest of unsecured creditors are trade creditors whose debts were incurred through day to day trading.
Baker Tilly says it does not expect to see realisations sufficient to enable distributions to creditors of this class.
To download the full report, click here.