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Bahamas Broker: $440m Action Out In Under Four Days

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Four Ukrainians yesterday withdrew a lawsuit alleging a $440m fraud against a Bahamas-based broker/dealer just four days after it was filed in the southern New York federal district court.

The move by Oxsana and Volodymyr Hryn, together with Elizabeth Lata, Ihor Ushenko and their corporate vehicles, to “voluntarily dismiss without prejudice” the claims against Weiser Global Capital Markets and its senior executives also occurred just three days after a New York judge declined to hear their bid for an injunction and restraining order.

Judge Naomi Reice Buchwald, in an October 14 notation, ruled that she lacked “subject matter jurisdiction” - meaning that the southern New York federal court lacks the authority to deal with the case. The voluntary dismissal, though, does not prevent the Ukrainian quarter from refiling the action/claims with a different court at another date.

The four and their numerous corporate vehicles had effectively sought an asset freeze against Weiser and its affiliate, Weiser Asset Management, and senior executives Christos Livadas (also known as Chris Livas); Christos Papaioannou; Jamaal Stubbs; Shelby Brice; Courtney Filipenko; and Rahul Kirpalani.

They had also wanted the New York court to rule that the Bahamian firm, Alan Cole & Co, produce all financial records relating to Weiser for the years from 2018 through to 2021 in its capacity as the broker/dealer’s accountant.

It is unclear whether the failure to effectively shut down Weiser’s business resulted in the lawsuit’s withdrawal. And Tribune Business efforts to obtain comment from Weiser on the matter also drew a blank.

This newspaper initially sought to reach Mr Stubbs, who was named as Weiser’s point person in the list of Securities Commission registrants, when it contacted the Balmoral Corporate Centre-based broker/dealer for comment.

However, it was informed that he had previously left the company although there is no suggestion that is related to this lawsuit. Tribune Business was told to send an e-mail to a specific address, which it did, adding that a response was required by yesterday, but no reply was received. The woman who this newspaper spoke to said she was unaware of the New York lawsuit.

The Ukrainian quartet’s multiple corporate vehicles, which are domiciled in various jurisdictions including The Bahamas, Belize and St Kitts and Nevis, often adopt the names of ‘blue chip’ and not-so ‘blue chip’ financial companies such as State Street and Bear Stearns.

Their original action alleges that they used these vehicles to make loans, which are secured against shares and other securities owned by the borrower. They claim that Weiser was retained as a custodian to receive the assets pledged by borrowers as collateral; remit the cash loans made by the Ukrainians; and manage the collateral assets via various depository accounts.

However, the Ukrainian quartet subsequently alleged that these collateral assets were removed by Weiser from the depository accounts without their permission.

“When plaintiff beneficial owners contacted defendants in order to inquire about what was taking place, their inquiries were entirely neglected despite the fact that the depository accounts continued to show diminishing balances in excess of tens of millions of dollars, sometimes in a single day,” the Ukrainians claimed.

“In total nearly $290m in cash and approximately $150m in securities has vanished from the plaintiffs’ depository accounts within a period of days without explanation, and without any ability by the plaintiffs to gain access to same.”

These allegations have now all been withdrawn and dismissed within the space of four days. There is nothing to suggest Weiser, its executives, owners, staff and employees have done anything wrong in relation to the matter.

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