City Credit Capital Goes Bankrupt With £10M In Trader Funds Missing

CFD broker, City Credit Capital, went into administration in June. It has since emerged that millions of pounds of client funds are missing offshore, with administrators uncertain whether the funds will be recovered.

Key Takeaways

• CCCUK was an FCA-regulated firm, owned by Alfred Tang, that operated City Credit Capital and CIX Markets.
• The company’s biggest trading counterparty was a Malaysian entity, CCC (Labuan) Limited, which was also owned by Tang.
• A report from administrators, Begbies Traynor, suggests CCCUK invested in CCC (Labuan) Limited using money advanced by its professional clients.
• With CCC (Labuan) Limited also entering administration, the firm is unable to repay its professional clients, leaving a shortfall of approximately £10 million.

Where Did The Money Go?

A statement from the administrators shows that CCC Labun owed CCCUK approximately £7.7 million. There is also an outstanding loan of £3.1 million.

The administrators, Begbies Traynor (Central) LLP and AABRS Limited, believe this money originated from funds that were effectively advanced by CCCUK’s professional investors.

Following pressure from clients to repay the money owed, one investor eventually issued a statuary demand, which the firm could not meet.

Whether the broker’s professional investors will get their money back will ultimately depend on the administrators’ ability to recover the missing funds from CCC Labuan.

Bleak Financials

While the reason for CCCUK falling into liquidation is unknown, its financial performance has fallen in recent years.

The firm was profitable in 2017 when it enjoyed revenues of over £13 million, however fast forward to 2021, and its revenues had dropped to just over £1 million, with a loss of nearly £4 million.

The Importance of Choosing a Reputable Broker

These events highlight the importance of using reputable brokers that have a strong track record.

We recommend signing up with large brokers that have years of experience, sufficient liquidity and an excellent reputation.