XNT LTD (brand name – EXANTE) is a brokerage firm that offers access to over 1,000,000 financial instruments across markets, including stocks, commodities, bonds, options, futures, and currencies. It offers a proprietary trading platform – the EXANTE trading platform – with a network of over 1,100 servers to ensure efficient trade execution and safe data transfer.
In 2015, the US Securities and Exchange Commission accused nine clients of EXANTE of engaging in unlawful trading activities through their accounts. The defendants were alleged to have illicitly obtained over 100,000 press releases from prominent PR firms such as Marketwired, PR Newswire New York, and Business Wire San Francisco. These press releases contained confidential corporate data, including financial reports and company earnings. The SEC claimed that the defendants utilised 800 of these releases to execute trades in the financial markets prior to the public release of the information, resulting in illegal profits exceeding $100 million.
From Day One, EXANTE vehemently denied all allegations. The broker stated that the SEC’s filings misrepresented their business model by describing the execution-only broker as a ‘hedge fund’ and suggesting that they had taken a large portion ($24 million) of the illegal profits. The broker also engaged with regulatory bodies at the time, including the MFSA in Malta, to clear their name and establish their innocence.
A spokesperson for EXANTE said, “We have checked all the information available and have sent thousands of documents to the SEC and MFSA. We are also collaborating with the local police who are investigating the claims.”
As the investigation went on, US authorities had also frozen EXANTE client accounts, which caused concern for the broker as they began to lose trust from their own clients and the trading community at large. In other words, EXANTE’s reputation took a huge hit, as this was, at the time, one of the largest scandals and cyber-fraud cases in the United States.
Over time and through the efforts of American investigators and EXANTE’s own legal representatives, it slowly became clear that the allegations were unfounded, and that EXANTE was innocent. The SEC found no evidence of illicit market activities among the broker’s clients, and the frozen assets had no connection to any of the defendants mentioned in the SEC’s initial complaint.
The SEC dropped all charges and allegations against EXANTE shortly after these discoveries came to light. Assets that were frozen in EXANTE client accounts were also unfrozen by the US District Court in Newark, on the basis that they had received ‘additional consistent information establishing that the assets’ owners are unrelated to the alleged illicit trading scheme’.
Though the incident was swiftly dealt with through the thorough investigations led by the SEC and EXANTE’s own legal department, the broker’s reputation suffered initially, despite charges being dropped. EXANTE’s senior management team expressed disappointment in how US authorities had handled the case, stating that a simple clarification of the nature of their business could have prevented the scandal. Nevertheless, they appreciated the SEC’s mission to protect investors from fraud, as transparency and market accessibility were among the broker’s own core values.
Since reclaiming their innocence in this unfortunate incident, EXANTE have worked hard to rebuild their reputation within the financial industry and have succeeded in regaining trust and loyalty from the wider trading community. As of 2023, it is one of the leading brokers based in Europe, and it has active clients from around the world. It has also since gained licensing in more regions, reiterating their commitment to market transparency. Today, the EXANTE brand and trading platform are used by reputable brokers regulated by the FCA in the United Kingdom, the SFC in Hong Kong, the MFSA in Malta, and the CySEC in Cyprus.
