Disclaimer
We have been following the story of the rise and fall of Migom Bank, the once-promising neobank, for a while now and are still getting a lot of requests for updates on this intriguing saga. So, we’ve had our team investigate the latest status of the bank’s business, contacted the regulators in Dominica, the clients and the shareholders of the bank, their lawyers, accountants, etc. As a result, we gleaned enough information to put together this follow-up report.
It appears that the long-lasting battle to oust Thomas Schaetti, who has been in sole control of the bank and its holding company for the last 1.5 years, and its President and CEO since inception, has currently entered a stalemate, where the resolution is depending on the courts in Austria. The lawyers involved in the process told us that the court decision is expected any minute but, at the same time, can take weeks, if not months, to arrive. That is simply due to the unpredictable nature of the Austrian court system and its general overload with pending cases.
In the meantime, Thomas Schaetti reportedly has pulled all the stops trying to oppose the execution of the legitimate transfer of shares to the new investors, including prank calls and threats to the attorneys representing these investors. That begs the question: why is someone whose job is to save, manage, and develop the business of the failing bank trying so hard to prevent the bank from being saved and funded by the group of investors? He is even rumored to have facilitated false police reports and smear articles in some online media.
One such apparent smear article alleged a EUR 120M transfer of the bank’s assets into a crypto cold wallet by one of the bank’s original founders; the article was all too obviously trying to picture him as a villain. That caught our attention. We reviewed the financial statements officially published by the bank’s holding company on the site of the United States Securities and Exchange Commission (SEC). We also requested the financial statements, which Thomas Schaetti had been submitting to the financial regulatory authorities in Dominica, where the bank is holding its license.
While our investigation is still ongoing, the first results are quite surprising. According to the financial statements filed with the SEC by the bank’s holding company, the bank’s assets at the end of 2022 have been certified by Thomas Schaetti to be about EUR 20M. The filings in Dominica have shown an even more meager amount. So, where did the alleged EUR 120M come from? Was that just a fantasy amount simply to make the imaginary villain look more despicable and distract attention from the real problem of missing clients’ funds? Or did Thomas Schaetti, who reportedly had exclusive and sole access to the custody accounts of Migom Bank, in an effort to villainize someone else, actually blabber out a snippet of truth by accident? If that’s the case, large amounts of the clients’ funds were moved off the balance sheet. Our investigation points to the latter, and the destination of that “off-balance sheet money train” seems to be another company solely owned by Thomas Schaetti in Luxembourg.
That’s where, as they say, the plot is thickening. We have requested and are expecting some disclosures from the respective regulatory and tax authorities, which might assist us in shedding further light on this developing story.
In the meantime, the clouds are gathering across the Atlantic. The disgruntled clients of Migom Bank are starting to take action to recover their holdings with the help of the legal system and the regulators in Dominica; the American shareholders of the bank’s holding company seem to have awakened to the fact that their stock is set on a nose-dive trajectory by the same people whose most important duty of care was hard work aimed at the appreciation of that stock.
In fact, within a very short time, the stock, once valued at over $100 per share, might become worthless if the SEC and FINRA decide to terminate the publicly traded status of the holding company. The management failed to file any mandatory disclosure or financial statements with the SEC for over a year, ceased to communicate with the shareholders, and has made no known effort to save the company or its revenue-generating wholly-owned subsidiary from imminent collapse.
As we were told, over sixty shareholders of Migom Global Corp, the holding company that owns Migom Bank, are in active negotiations with their lawyers. They are likely working on filing a class action lawsuit in US Federal Court seeking disclosure of relevant information and recovery of potentially significant damages inflicted on the company, which at one point had a market capitalization of over $700 million.
We’ll follow this developing story closely and report the outcome of our investigations as the requested relevant documents and witness statements come in.
