The majority shareholder of now-bankrupt FlowBank, FlowB Holding Switzerland AG, intends to take “all necessary procedures” to challenge the Swiss regulator's decision to open bankruptcy proceedings earlier this month.

“Considerable Harm” Caused to the Company and Shareholders

Although the shareholder did not specify the exact actions, it highlighted that the move would be to “ensure that its rights are respected,” adding that the regulatory decision violated the rights of FlowBank and its shareholders and caused “considerable harm.”

“This decision condemns an innovative and growing bank, whose business was profitable and which was known and appreciated by thousands of clients and partners in Switzerland and abroad,” said Charles-Henri Sabet, a member of the Board of Directors of FlowB Holding Switzerland.

Action after 3 Years

Switzerland’s Financial Market Supervisory Authority (FINMA) revoked FlowBank's operational license on 13 June 2024 and initiated bankruptcy proceedings against the company. Geneva-based FlowBank operated as an online brokerage.

The harsh regulatory action came as the regulator had been scrutinizing the company since October 2021 for breaches of supervisory laws, particularly concerning capital requirements, organizational adequacy, and risk management. Although an external auditor was appointed in October 2022, the regulator alleged that the bank continued to violate capital ratio requirements and maintain deficiencies in various areas of its operations.

The shareholder stressed that the regulatory decision “has no basis in fact.”

“While claiming that FlowBank no longer has the required minimum capital, FINMA is silent on the fact that all the funds required to meet all applicable requirements have been deposited by the undersigned shareholder in a deposit account opened with a Swiss bank, pending FINMA’s approval of the corresponding capital increase,” the shareholder’s press statement noted. “Instead of approving the capital increase decided by the bank’s shareholders, FINMA issued a bankruptcy decision on the basis of an alleged lack of capital that was, in fact, non-existent.”

Warnings Against Fraud

Meanwhile, FlowBank’s liquidator pointed out that fraudsters are taking advantage of the distressed clients of the bankrupt company by spreading false information that “accounts are now open and that transfers are once again possible.”

“This statement is false and does not come from liquidators: access to the FlowBank platform is blocked,” the liquidator stressed. “Any request for payment in exchange for a refund is fraudulent and should not be acted upon. We also advise you not to click on any links or open any attachments contained in such emails.”