Currency exchange broker goes bust

p19176UK-News-4-1

Published: Friday 16th January 2015 by The News Editor

Comments (0)

Foreign exchange broker Alpari UK has gone bust after its clients racked up huge losses in the wake of Switzerland’s shock move to abandon the country’s peg to the euro.

The company, which sponsors West Ham United FC, said the decision to remove the currency floor resulted in the majority of clients sustaining losses which exceeded their account equity.

Alpari said: “Where a client cannot cover this loss, it is passed on to us. This has forced Alpari (UK) Limited to confirm today that it has entered into insolvency.”

It said retail client funds were segregated in accordance with regulatory rules.

The surprise move by the Swiss central bank to drop the policy capping the franc’s value at no more than 1.20 euro triggered a level of volatility not seen by a major trading currency in many years.

At one point yesterday, the franc surged by around 30% against the euro after the removal of a policy introduced at the time of the European debt crisis in September 2011.

Sterling was also down sharply against the franc, falling by as much as 26% in value before partially recovering to be 14% off later.

Financial spread betting firm IG Group said yesterday that it expects to incur losses of up to £30 million, dependent on the company’s ability to recover client debts.

Published: Friday 16th January 2015 by The News Editor

Comments (0)

Local business search