Samtrade FX companies placed in judicial management

Following the freezing of its operations and client withdrawals in the aftermath of the arrests of several members of its senior management, offshore Retail FX broker Samtrade FX has issued a statement (see full text below) stating that it has filed for its corporate and operating entities to be placed in “judicial management” – Singapore's equivalent of administration.

Former PwC partner Goh Thien Phong and his GTP Advisory PAC, which specializes in corporate restructuring and insolvency, and Chan Kheng Tek from PwC Singapore will serve as Samtrade FX's “interim judicial managers.”

From our perspective, the application indicates that Samtrade FX's management (at least those who aren't currently incarcerated) believes that the company's issues with the Singapore regulator and police are unlikely to be resolved in the near term, necessitating the company's hiring of outside managers.

It also means that Samtrade FX's client assets are unlikely to be unfrozen anytime soon. The judicial managers' job is to locate and secure client assets, compare them to what should be there based on company records and client claims, and then (eventually) return money to Samtrade FX's clients.

There was no mention of Samtrade FX's ASIC-licensed operations in Australia, Samtrade (Australia) Pty Ltd, which appear to be unaffected.

Following a joint investigation by the Monetary Authority of Singapore (MAS) and the Singapore Police Force, Samtrade FX was raided in late December. Three members of the company's management team were arrested, including (we believe) Sam Goh, the CEO and controlling shareholder.

The action was taken because Samtrade FX was operating out of Singapore without a financial services license.

The authorities also stated that there is reason to believe that illegal trading activities have taken place on the platform.