FXCM’s IB ATC Brokers files for bankruptcy

FXCM’s IB ATC Brokers files for bankruptcy

- in All News, Forex Brokers
atc-brokers-website-850

Avail Trading Corp., an introducing broker (IB) operating under the brand ATC Brokers, filed for bankruptcy with the California Central Bankruptcy Court under Chapter 11 of the US Bankruptcy Code on 9 February, 2016, according to the company’s application published on Friday by PacerMonitor.com. A total of 10 creditors are holding $1.56 million in fully unsecured claims, with a single one holding slightly over $1.5 million.

According to the published document, Avail Trading Corp.’s assets are in the $100,001-$500,000 range, which is significantly less than the claimed amount.

The broker is an IB of Forex Capital Markets, (NYSE:FXCM), which is one of the largest forex brokers in the US.

ATC Brokers Avail Trading bankruptcy
Avail Trading Corp.’s application for voluntary bankruptcy

Under the US regulations, the Securities Investor Protection Corporation (SIPC) insures up to $500,000 of traders’ investments in case of a US broker’s default. However, this does not apply for brokers of retail forex and futures trading instruments.

ATC Brokers FXCM accounts
FXCM account registration form on ATC Brokers’ website

Data on ATC Brokers’ website, however, shows that as it is an introducing broker its client accounts are opened and executed through FXCM. Having this in mind, in case of default the funds of the broker’s clients should not be affected as they are handled by another broker.

Usually, companies which file for bankruptcy under Chapter 11 of the US Bankruptcy Code, or the so called Reorganization chapter, aim to gain some breathing space while reorganizing their finances and arraigning payment plans with creditors. In such cases, companies usually intend to continue their operations after the bankruptcy proceedings have been finalized.

According to the document, the company’s board of directors voted on 3 February to grant Jack Manoukian, one of the company’s founders, the right to file a voluntary petition for bankruptcy. Brian Weiss, the company’s chief restructuring officer, was solely and fully authorized to take all decisions regarding bankruptcy and restructuring once the bankruptcy petition has been filed.

ATC Brokers has a UK-based and regulated sister company and is not clear at this point whether it would be affected by or involved in the US company’s bankruptcy procedure. Investments of up to £50,000 of the UK broker’s clients are safeguarded under the Financial Services Compensation Scheme (FSCS).

Avail Trading Corp. is a member of the National Futures Association (NFA) and is a registered introducing broker with the Commodity Futures Trading Commission (CFTC). According to the NFA’s register, it still has a status of an approved forex firm and NFA member, as well as an active registration as an IB. Meanwhile, the broker has provided no data indicating bankruptcy-related issues on its websites.

California-based ATC Brokers was set up in 2005, while its UK sister company was established and license by the Financial Conduct Authority (FCA) in 2014. The two brokers offer trading in forex. They both support the MetaTrader 4 (MT4) trading platform and its Trade Copier service. The US unit, however, also offers trading in futures via the ATC Trader, which is its own proprietary platform for futures trading.

Source: PacerMonitor.com

4 Comments

  1. Marcia Aparecida Maluf Abrahao

    I did try to withdraw…

    ” We have received your request to withdraw funds from your trading account.

    However, we are not able to process the wire as we are receiving an “Invalid Beneficiary Number” error. Please review your banking details and let us know once the information has been updated.

    Regards,
    ATC BROKERS

  2. Marcia Aparecida Maluf Abrahao

    Then i receive an email…


    Hi Marcia,

    Unfortunately, I am still receiving an error when processing your beneficiary account number.

    Can you please confirm with your bank that these are the correct details?

    Thank you,”

  3. Douglass Ballan

    The company said it filed the chapter 11 to protect itself and hired a chief restructuring officer to help strengthen the operations, and cited that its financials are profitable and how the filing is not indicative of its financial standing. Its financials were required to be disclosed as part of the chapter 11 process. Nonetheless, the move appears to have been a defensive maneuver against the litigation, and the company plans to continue.

  4. Marcia Aparecida Maluf Abrahao

    The end:

    “Hello,

    The wire was completed earlier today with Barclays per our email communications.

    Have a great weekend!

    Regards,
    Jen”

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