Charles Henri Sabet, the founder of Flowbank, has announced plans to file a lawsuit against the financial market regulator after being declared bankrupt by the Swiss Financial Markets Supervisory Authority (Finma). Despite facing disciplinary proceedings from Finma and being instructed to carry out a capital increase, the bank was unexpectedly declared bankrupt due to its insufficient capital base.
The majority shareholder, Sabet, believes that there was enough capital and liquidity for operations. He is seeking legal action against Finma’s decision with lawyers preparing for a possible lawsuit. Notable lobbyist Thomas Borer has also criticized Finma for its conduct, stating that the agency lacks legal expertise in regulating institutions with new business models.
Finma defended its decision by claiming that Flowbank’s proposed emergency financing was not an acceptable solution leading to forced bankruptcy. The authority claimed that it had been in close contact with Flowbank for months and made numerous efforts to address the bank’s capital situation. Despite their failings, Finma’s tough approach has garnered attention as such crackdowns are uncommon.
The future of Flowbank remains uncertain as the bankruptcy process unfolds. Lawyers have taken over the bank’s operations, and customers will have their deposits refunded according to a schedule of claims. Sabet believes that Flowbank could have been a success story and is hopeful for a future solution for customers and employees.
