Banks That Lent Failed Trader Millions Get Less Than 4% Back

  • Liquidator of BLF has abandoned attempts to secure more funds
  • BLF owed almost 12 million pounds at time of May 2013 collapse

BLF Global Asset Management Ltd., a finance firm tied to Alberto Statti that collapsed months before he set up failed brokerage Invexstar Capital Management Ltd., will leave its creditors with less than four pence for every pound they’re owed.

Banks including JPMorgan Chase & Co. and Citigroup Inc. were owed about 12 million pounds when the London-based firm foundered in May 2013, four years after its creation. They will get no more than the 430,000 pounds ($558,000) they’ve already been paid after the liquidator abandoned probes into some of Statti’s investments, according to an Aug. 9 U.K. company filing.

While the demise of BLF barely dented the bottom lines of many of the creditors, it forms part of what a judge in London last week referred to as Statti’s “chequered history,” along with an earlier fund company that stopped trading amid losses in 2008. The Italian bond-trader went on to found brokerage Invexstar, which failed in 2015 and triggered losses of about 120 million pounds for lenders including BNP Paribas SA and Nomura Holdings Inc.

For more on the fallout of Invexstar’s collapse, click here.

“I can now confirm that there is no prospect of any further dividends being declared,” BLF liquidator Robert Woolfson wrote in the report. “The funds realized have been used to pay prior dividends to unsecured creditors and for paying the expenses of the liquidation.”

Woolfson declined to comment. He didn’t provide contact details for Statti, who couldn’t be reached. Jennifer Zuccarelli, a spokeswoman for JPMorgan in London, and Citigroup spokeswoman Edwina Frawley-Gangahar both declined to comment.

Statti was the “de facto director” of BLF, which described itself as an “arranger of financial instruments,” filings show. He wasn’t registered as a board member while an offshore company called Dominion Fiduciary Trust Ltd. owned all the firm’s shares, according to the filings.

BLF owed about 2.4 million pounds to JPMorgan, 1 million pounds to Citigroup and additional amounts to lenders including Royal Bank of Canada, Commerzbank AG, Danske Bank A/S, Deutsche Bank AG and HSBC Holdings Plc, filings show. The firm had assets of about 600,000 pounds when it collapsed.

The liquidator had pursued Statti in an attempt to secure more funds for creditors, including a probe into alleged “unauthorized trading” that had increased BLF’s losses, the filing shows. Woolfson has now abandoned the claim because there are no funds “to finance such an action.”

The liquidator’s costs are 351,000 pounds since 2013, of which he had drawn about 248,000 pounds as of May, the filing shows.

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