LeapRate Exclusive… Further to our report yesterday on KPMG’s update on its administrator work for the Alpari UK bankruptcy, LeapRate has learned, via filings made by KPMG, that FCA-regulated broker ETX Capital has made an additional payment of $1.2 million to the Alpari UK estate.
We had reported back in March 2015 that ETX won an auction held by KPMG for the Alpari UK client list. In July we further reported that ETX had managed to sign up about 6,000 ex-Alpari UK clients from the list bringing with them $30 million in client funds – in part due to an offer of credit lines ETX had made to Alpari UK clients against refunds those clients had yet to receive via KPMG.
Well it turns out that ETX had paid very little upfront for the client list – £232,000, in fact (or USD $340,000). The transaction consideration was mainly back-end loaded, based on how successful ETX was in the ensuing months in securing deposits of those clients on the list.
And it does look like ETX was fairly successful in both attracting and retaining ex Alpari UK clients. We believe that the agreement with KPMG was for a back-end payment in the neighborhood of 5% of deposited funds. The $1.2 million figure would indicate that ETX did indeed receive deposits in the $30 million neighborhood.
The official filing from KPMG stated:
As previously reported, we entered into a complex agreement with ETX, designed to maximise the value of the client list. Within that agreement there was upfront consideration which has already been received (but remained subject to adjustment), and a deferred consideration element. The principal determinant of the deferred consideration was the number of clients who chose to deposit funds into their new ETX account and the movement of those funds deposited over time.
The period for payment of the deferred consideration and the adjustment of consideration has now expired and we are pleased to say that we have agreed with ETX that the amount due to the Company in respect of those clients who opted to have payments made to an ETX account is USD 1,219,581.