EXANTE clears name after false implication in scandal

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EXANTE, an international broker, has won an important victory in a set of mistaken 2015 SEC filings falsely implicating the broker in an insider trading scandal.

Launched in Malta and based across multiple global offices, EXANTE was founded in 2011 by derivatives traders Alexey Kirienko, Anatoliy Knyazev, and Gatis Eglitis. Today, the broker is regulated by the MFSA, CySec, FCA and the SFC, and offers its clients direct access to global markets through its proprietary trading platform, acting as an execution-only broker. Product lines include exchange-traded and over-the-counter financial instruments, as well as cryptocurrencies. As of 2023, EXANTE has over $2 billion in client assets on trading accounts and provides execution services for a large range of global markets.

Recent expansion has grown the offering and footprint of EXANTE, but the core offering of a fully regulated, global platform with round-the-clock customer service and unrivalled client privacy remains unchanged. Working with professional clients to execute trades at the most competitive rates available, EXANTE offers execution services on over 600,000 tradable securities. The broker’s recent expansion has brought new clients, and the firm commands significant loyalty among long term partners.

It is clear EXANTE has benefited from a strong run of recent growth and expansion into new markets, but the route has not been all plain sailing.

EXANTE’s false implication in 2015-16 SEC scandal

In February 2016, the US Securities and Exchange Commission (SEC) dropped fraud charges against EXANTE for allegedly taking part in an insider trading scheme using hacked non-public information, charges originally raised in a shock 2015 announcement. The scheme, which involved hackers selling advance access to corporate earnings statements, netted as much as $100 million in illegal profits for a group of hedge funds.

This was achieved by trading in advance of the public release of earnings and corporate information from thousands of unreleased press statements from Marketwired, PR Newswire, and other distribution services. At the time, American investigators believed that EXANTE could have made more than $24 million from the scheme, and the SEC froze the broker’s client assets for a short period with the investigation underway. Bizarrely, the SEC described EXANTE as a ‘hedge fund’ throughout the filings, despite this never being the licensed activity of the broker. Some of the defendants in the case were EXANTE clients, possibly accounting for the mistaken inclusion of EXANTE in the original, 2015 filing.

At the time the scandal broke, EXANTE had around 400 active clients, split equally between corporates and professional individuals. News of the story spread quickly, and sensational headlines dominated the local news cycle. In the weeks following the allegations issued by the SEC, EXANTE hired its own legal representative to contest the unjust claims. The Maltese broker found – swiftly – that 99.9% of the assets in the frozen accounts bore no connection to any of the defendants identified in the SEC’s complaint. They also discovered that 92 out of 102 customers with frozen assets had never traded in American securities during the investigation period, further highlighting the inappropriate nature of the asset freeze. Following these findings, the US District Court in Newark indicated that it would be willing to release the assets in the frozen accounts within a few weeks, stating that EXANTE had provided sufficient and ‘consistent information’ to establish their innocence. In February 2016, as the investigation expanded to include a larger number of funds, EXANTE was dropped from the investigation, with the original filings revoked.

During the first set of filings, EXANTE released an official response to the SEC’s unjustified freeze of assets and capital. The broker declared that the complaint ‘completely mispresent[ed]’ the business, its business model, and the regulatory conditions it operated in. EXANTE spokespeople were quick to point out that ‘any illicit trading will not be tolerated’ by clients and stressed again that the business model of the brokerage, like all execution-only services, does not involve taking advantage of market movements to profit, or indeed any form of proprietary trading.

Despite the confusion, EXANTE co-founder Gatis Eglitis voiced his appreciation for the SEC at the time in its efforts to protect honest investors from fraud, whilst expressing justifiable disappointment at the broker’s reputation being tarnished due to a lack of thorough investigation. The firm has worked hard to achieve its current level of success, and it has been a long journey to gaining investors’ and the industry’s trust. Eglitis stated that EXANTE could have easily explained its business model to the SEC and launched a rigorous and responsible investigation to get to the bottom of the situation – had the SEC contacted them before launching these unfounded allegations and freezing client accounts. In the end, the broker successfully extricated its clients from the freeze but has suffered adverse publicity in the process.

Moving on from the unfounded allegations

Unsurprisingly, EXANTE is keen to leave this unfortunate incident behind, cooperating fully with the SEC while maintaining client service in the regulated markets where the broker operates. Since 2016, business operations have gone from strength to strength, and EXANTE continues to invest in people as well as making large charitable donations to UNICEF. The continuing trust of their professional clients has been crucial throughout the difficult period following the charges, and this confidence has been rewarded as EXANTE continues to expand its product offering and client services. Even when charges are groundless and withdrawn, it is not easy to recover a reputation that has been tarnished, but EXANTE appears to be well on its way to repairing the damage caused.



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