The beleaguered yet battle-hardened CEO of MMCIS, a Ukrainian retail FX broker, threatened to “expose” his rivals, affiliated payment systems and business partners, in an attempt to release client funds belonging to MMCIS clients. , Roman Komica turned to the social media last week to deliver on his threats and launch a stinging attack on various parties connected to MMCIS and its subsidiaries/affiliates. First and foremost, Mr. Komica’s allegations are directed at ‘Dengi Online’ (translated as ‘Online Money’) for “appropriating client funds”.
“The Owners of Dengi Online Have Simply Stolen the Money”
In a posting on Russian social media site VKontakte, Mr. Komica writes: “For the record, the lion’s share of MMCIS clients’ money is with Dengi Online which positions itself as a payments provider. It’s clear to me that the owners of Dengi Online have decided to simply appropriate client money and are now using standardised rebuttals to refuse the return of client funds.”
Mr. Komica goes on to add: “We will go to court, inform law enforcement agencies and explain to clients that they themselves can claim money back from Dengi Online. We see their actions as a banal theft and I would like to formally declare that all loyal employees, including myself will do everything in our power to return the misappropriated client funds back to clients as well as prosecuting those responsible.”
The Plot Thickens
takes a turn for the worse when Mr. Komica states: “In effect, MMCIS and Dengi Online have always been the same company, growing in parallel for many years.” It appears that Dengi Online served as the broker’s financial hub aggregating incoming and outgoing payments with compliance functions included. The payments provider was effectively the company’s financial heartbeat.
“Apart from deposits and withdrawals, Dengi Online was responsible for managing payment transfers to and from off-shore jurisdictions. Their obligation to MMCIS was to conduct incoming-outgoing payments operations for clients. Therefore, a significant portion of client funds and MMCIS liquidity was always under the control of Dengi Online,” says Mr. Komica.
Dengi Online has responded to Mr. Komica’s comments with a generic marketing mesasge: “Dengi Online currently works with over 70 payment systems both in Russia and abroad. The number of partners we work with is constantly increasing. By introducing new payment systems, Dengi Online facilitates access to a wide range of online businesses and helps our partners to create additional revenue.”
Legacy Payment System Problems Sparked by Dengi Online
Mr. Komica compares the multiple sources of revenue generated by its payment provider with MMCIS refusing to charge additional fees on top of the existing spread.
Mr. Komica says,“Dengi Online charged a fee for receiving payments, they charged a fee for forwarding payments to the inter-bank market, they charged a fee for receiving funds from the inter-bank market and finally, they charged a fee to return funds back to the client. MMCIS obtained revenue only from spreads, a large part of which, went to pay payment system commission fees. Dengi Online was the initial instigator of additional verification checks in order to ensure all funding processes abided by regulatory rules. Dengi Online assured us they were in discussions with the regulator regarding complaint practises with incoming and outgoing funds.”
“Discussions that lasted over 2 weeks with the Head of Security at Dengi Online, Yuri Telman, and one of its owners Igor Ivchenko, have not led to a resolution. Former partners and colleagues have turned into bureaucratic opponents, requiring paperwork to resolve issues that used to be done verbally or via email,” says the MMCIS CEO.
“Taking advantage of the fact that not all proceedings were documented, Dengi Online are misrepresenting the facts and distancing themselves from their involvement. However, we have sufficient documentation to prove the majority of client money remains with them and we are certain Dengi Online will not be allowed to lay claim to those funds as well as being prosecuted for their actions. We have several agreements with them and we know many of their offshore entities, payment methods and e-wallet details.
MMCIS employees are ready to provide first-hand witness accounts of our relationship with Dengi Online having worked closely with them on many incoming and outgoing payments. Our clients have payment transfer confirmations and we have a log of all clients that used Dengi Online to transmit payments,” Komica adds.
We Have Merged with ‘Mill Trade’
Irrespective of the payment system problems, client complaints and bad publicity, MMCIS has taken the step of “absorbing” a rival scandal-prone Ukrainian broker called Mill Trade.
“We have merged with Mill Trade after a difficult process and a difficult history of interrelations between us. Initially, Mill Trade was setup by former MMCIS managers that broke away to setup their own firm. Our relations in the initial stages were strained and we got as far as considering legal proceedings. However, Mill Trade came to us for help as it was facing the same problems we were. This was because the people responsible for the cyber-attack on MMCIS were also targeting Mill Trade believing us to be affiliated,” Komica explains.
Mr. Komica says, “Mill Trade could not cope by itself and thus agreed to a merger with MMCIS in exchange for our help in restoring their liquidity. We didn’t see a difference between rescuing one company or two. In the foreseeable future, business processes and operations between the two companies will be synchronised and key departments unified. MMCIS and Mill Trade will operate under a single brand name with Finance, Risk and Client Support functions all operating from under one roof. The merger will help to free-up additional resources required to optimise our activities in this crisis period.”
“We have kept the details of the merger secret as part of a confidentiality agreement which was in effect subject to the deal being completed and finalised. As of today, that process is now complete.”
At the end of his tirade, the crisis-resistant Mr. Komica exclaims, “We have a backup plan to revive MMCIS even if all assets are lost – but it will take up to a year to implement. Even in a worst-case scenario we will not sit idly by. We intend to pursue justice and the return of client funds in the shortest possible time frame. We could return to normal operations even sooner.”
Written by Vadim Sviderski and first published on
Translated by
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