Exclusive FNG … FNG has learned that the management and shareholders of Swiss neobank/neobroker FlowBank plan to take legal action against the country’s financial regulator FINMA, to oppose the company’s forced bankruptcy and liquidation.
Two weeks ago, FINMA announced that it was revocation of FlowBank’s banking license and effectively shutting down the company, stating that FlowBank no longer had the minimum required capital for its business activities, amid fears that the bank was over-indebted.
FlowBank’s controlling shareholders, led by founder and CEO Charles-Henri Sabet, have apparently hired the services of Thomas Borer, the former Swiss Ambassador to Germany, who now runs the strategic consulting firm Dr. Borer Consulting. (Crypto investment firm CoinShares is also a major backer of FlowBank and has already said it will take an impairment charge of more than £21 million to write off its investment in FlowBank). The group plans to consider “all necessary legal avenues to challenge FINMA’s decision” in order to protect shareholders’ rights.
The group apparently claims that FINMA’s decision was wrong and that FlowBank did have the required capital levels to operate and maintain its Swiss bank licence.
Even if FlowBank’s shareholder and management team were successful in some sort of legal action, it would likely not save FlowBank as the company is already in liquidation by FINMA-appointed Walder Wyss Ltd. All customer CFD positions had already been closed and liquidators are currently working to pay out secured deposits “as soon as possible”.
Meanwhile, FINMA and the liquidators are now reporting that “donors” are trying to take advantage of the situation by pretending to be FlowBank SA in liquidation, contacting (now former) FlowBank customers, mainly via email, and stating that the accounts are now open and that transfers are again possible. The regulator and liquidators stressed that any request for payment in exchange for a refund is fraudulent and no action should be taken. They also advise anyone who receives such a message not to click on any links or open any attachments contained in such emails.
Through Dr. Borer Consulting, shareholders issued the following press release (translated from the original French statement, which also follows the English translation below):
Press Release – FlowB Holding Switzerland AG
The majority shareholder of FlowBank SA (FlowBank), FlowB Holding Switzerland AG, strongly condemns the decision of the Swiss Financial Market Supervisory Authority (FINMA) to initiate bankruptcy proceedings against FlowBank.
This decision has no substantial basis. While claiming that FlowBank no longer has the required minimum capital, FINMA is silent on the fact that all funds required to cover all applicable claims have been deposited by the undersigned shareholder in a deposit account opened in a Swiss bank, in pending FINMA approval corresponding capital increase. Instead of approving the capital increase decided by the bank’s shareholders, FINMA issued a bankruptcy decision based on an alleged lack of capital that in fact did not exist.
FINMA’s decision violates the rights of FlowBank and its shareholders. Deals significant damage. FlowB Holding Switzerland intends to take all necessary steps to ensure that its rights are respected.
Charles-Henri Sabet, member of the Board of Directors of FlowB Holding Switzerland AG, said: “This decision condemns an innovative and growing bank, whose activity was profitable and which was known and appreciated by thousands of customers and partners in Switzerland and abroad. We have a special thought for the bank’s 147 employees, to whom we extend our sincerest thanks for their unwavering commitment, as well as our 22,000 customers, whom we thank for their trust.”
Press Release – FlowB Holding Switzerland AG
The majority shareholder of FlowBank AG (FlowBank), FlowB Holding Switzerland AG, strongly opposes the decision of the Federal Financial Market Supervisory Authority (FINMA) to initiate bankruptcy proceedings against FlowBank.
This decision has no substantial basis. While claiming that FlowBank no longer has the required minimum capital, FINMA ignores the fact that all funds necessary to comply with all applicable requirements were deposited by the undersigned shareholder in a bank account opened in a Swiss bank, in awaiting FINMA’s approval of the corresponding capital increase. Instead of approving the capital increase decided by the bank’s shareholders, FINMA issued a bankruptcy decision based on the alleged insufficient capital base which in fact did not exist.
FINMA’s decision constitutes a violation of the rights of FlowBank and its shareholders. Deals significant damage. FlowB Holding Switzerland intends to take all necessary procedures to achieve compliance with its rights.
Charles-Henri Sabet, Board Member of FlowB Holding Switzerland AG, said: “This decision condemns an innovative and growing bank, whose activity was profitable and which was known and appreciated by thousands of customers and partners in Switzerland and abroad. We have a special thought for the bank’s 147 employees, whom we sincerely thank for their unwavering commitment, as well as our 22,000 customers, whom we thank for their trust.”
We will continue to follow this story as it develops.