Administrative fines and bans for Maxigrid Ltd
Finally, on June 17th 2022, The Cyprus Securities and Exchange Commission (CySEC) took action against Maxigrid Ltd. It announced administrative fines totalling € 210,000 and bans against four exercising directors for management functions in Cyprus Investment Firms (C.I.F.s).
In specific, CySEC imposed the following administrative sentences.
- Shareholder and ex Non-Executive President of the Board, Roy Almagor (Israeli), receives an administrative fine of €200.000 and a five-year ban from exercising management functions in C.I.F.s.
- Executive Director of the Company Jekaterina Pedosa receives an administrative fine of €10.000 and a five-year ban from exercising management functions in C.I.F.s.
- Executive Director of the Company Katerina Papanicolaou receives a two-year ban from exercising management functions in C.I.F.s.
- Ex Executive Director of the Company Nikolai Monogarov receives a two-year ban from exercising management functions in C.I.F.s.
Maxigrid Ltd has been operating as a Cyprus Investment Firm (C.I.F.) with the trading styles Dualix and A.G.M. Markets license number 145/11, withdrawn as of February 14th 2022. Maxigrid collapsed after a law enforcement action initiated by German authorities resulted in arrests and upcoming indictments for several defendants in Germany. The investigation is currently ongoing.
Thousands of European victims got hurt by the activities of Maxigrid Ltd.
Maxigrid Ltd of Israeli Roy Almagor and its C.E.O. Jekaterina Pedosa, regulated by CySEC under license number 145/11, also has been processing funds as an unlicensed payment processor for many brokers scams such as RoyalsFX, LincolnFX, 10CryptoMarket, RoyalCBank, and others. For this purpose, Maxigrid used its bank account with the Lithuanian GlobalNetint and its own crypto platform BitandBuy.
No Funds To Meet Obligations
Furthermore, CySEC has determined that Maxigrid appears unable to meet its obligations arising out of investors’ claims and has no early prospect of being able to do so.
On June 7th, The Cyprus Securities and Exchange Commission CySec announced the initiation of the compensation process for the victims of Maxigrid.
“As per paragraph 18(1)(a) of Directive DI87-07 of 2019 for the Operation of the Investors Compensation Fund (R.A.D. 76/2019), CySEC has determined that the Company (member of the I.C.F.) for the time being, for reasons directly related to its financial circumstances, is unable to meet its obligations arising out of investors’ claims and has no early prospect of being able to do so,” the circular states.
The next step, if any, will see the I.C.F. inviting covered clients to make their claims against the company, designating the procedure for filing compensation applications and the deadline for their submission. Next, the fund publishes the details in at least two local newspapers, including the address at which investors may be informed about the progress of their applications.
The amount of the compensation payable to each client is calculated in accordance with the contractual terms governing his relationship with the faltering broker. Still, in general, the maximum amount doesn’t exceed €20.000.
Earlier in 2019, the CySEC has changed the maximum compensation for valid claims to be either 90 per cent of the cumulative covered claims or €20.000, whichever is lower. Therefore coverage = Min (90 per cent Χ claimed amount, €20.000). This means that an investor who holds €50.000 with a C.I.F., which runs into trouble and cannot pay, will get €20.000 from the I.C.F. However, if the claim is for €10.000, the coverage will be only 90 per cent or €9.000, not 100 per cent, as previously calculated.
No announcement from the I.C.F about the exact claim procedure for the Maxigrid clients (victims) has been made yet. We will keep you updated.