Exante has filed a case against Bank of Valletta in the First Hall of the Civil Court, requesting BOV to release access to accounts dubbed ‘clients’ accounts’, which Exante claims consist of funds belonging to its clients.
The Maltese company is alleged to have illicitly made US$24.5 million “ill-gotten gains” in a lawsuit filed by the US Security and Exchange Commission.
According to a complaint filed by the SEC in the New Jersey District Court, Exante holds proprietary trading accounts at Interactive Brokers and at Lek Securities, which were used in connection with the fraudulent scheme. In its complaint, the SEC explains that several of Exante's directors are also owners of co-defendant Global Hedge Capital Fund Ltd., and that the two entities share employees. The local case is not directly related to this, but to a freezing of the company’s assets which allegedly occurred as a result of the US allegation.
Exante, in the Maltese court action submission, states that the allegations made within the (SEC) complaint against the company are vexatious as they did not study the nature of the company and the services it offers, “so much so that it was mentioned as a Malta based hedge fund, when it is nothing of the sort and is a licensed Maltese broker”. The filed court application continues to read that Exante will defend itself in those procedures, “so much so that we have already instructed Washington Legal Firm Schulte Roth and Zabel to defend us in those proceedings”.
Exante, within the locally filed court action application, explains that the case before the Maltese courts does not concern what is being said in the US, but rather how BOV “illegally acted when it got to know, possibly through local or international media, about this complaint”.
Exante states that the bank, arbitrarily, without receiving any official orders, and without any precautionary mandate existing in Malta and no orders for this garnishee order, blocked access for the Exante to all the funds. They argued that this did not only occur for company funds, but also for their clients’ accounts “where there are funds that do not belong to Exante, but to its’ clients”.
In the submission for court action, the company states that it is licensed by the Malta Financial Services Authority (MFSA), and is authorised to provide any investment service, to hold clients’ money or customers’ assets, but not deal for their own account or underwrite. Exante argues that they operate a number of bank accounts with BOV, where the company deposits and administers funds that do not belong to the company, but rather to their clients in accounts known as “Money Account/Client Financial Instruments accounts. Within these accounts, a number of transactions occur in the name of their clients with their clients’ funds, the submitted court action request read.
The company also quoted from the Investment Services Act, which states that “a customer whose assets are held under the control of a subject person enjoys a right of ownership in such assets notwithstanding that they may be registered in the name and title of, or are otherwise vested in the subject person. Where such assets are held by the subject person as part of a common pool of identical assets or are held by the subject person as part of a common pool of identical assets or are otherwise held in a clients’ or common account, the customer shall have an undivided share in ownership of all assets held collectively by the subject person in such a pool or account”.
The company has asked the court to declare the bank’s conduct, in freezing the company’s clients accounts headed in the name of the company, to have been illegal and abusive.
They are also asking the court to order to bank to reactivate access by Exante to the clients accounts and for damages to be paid for by the bank.