Earlier today Baker Tilly, the special administrators of troubled UK FX broker LQD Markets, published a detailed report and proposals regarding the company.
The report revealed a raft of worrisome financial metrics, with the ones that are particularly stunning concerning the size of the deficit on client monies. Baker Tilly administrators say that on January 27, 2015, LQD Markets informed them of a deficit on client monies of $1.355 million.
The figure is hefty enough but it turned out it was not exhaustive at all. During the reconciliation process, the administrators got aware of extra 137 clients of the company that are owed $1.482 million. This way, the deficit on client monies is twice as big as initially reported, and actually stands at $2.837 million.
The administrators assure (former) clients of the broker that they should file their claims regardless of the size of the deficit. Baker Tilly is in contact and has informed the relevant authorities (including the FSCS) about the amount owed to clients and the size of the deficit.
One more important number should be mentioned – the amount owed to LQD Markets’ clients, which, according to the Director’s Statement of Affairs, is £3.38 million. The reading is not final.
Upon termination of its work, the broker had 223 introducing brokers, with the amount owed to them being treated in the same way as the deficit on client monies, that is, it will be an unsecured claim against the broker.
A note regarding the future of the broker: Baker Tilly proposes the company to exit the special administration via dissolution.
Straight after LQD Markets appointed the administrators, they received an offer for the purchase of the company from a business willing to acquire its share capital. However, given the rise in the size of the deficit on client monies, the administrators say a deal is unlikely.
On January 27, 2015, LQD Markets announced halt of operations because of the Swiss franc spike. The broker had a turnover of £354,481 in the year to December 31, 2014, whereas its net profit stood at meager £2,055.
To view the latest updates on LQD Markets’ administration process, click here.