Client’s $25 m trading loss caused collapse of financial group, says liquidator
A trading loss of $25 million by a Canadian client with a checkered past has emerged as the principal reason for the collapse of a Bahamas-based financial services group earlier this year.Caledonia Corporate Management Limited allowed 39-year-old Ontario resident George Georgiou to start trading without providing any cash or security of his own, instead lending him millions of dollars and pledging other clients' assets as collateral, which were subsequently sold to meet a margin call. As Caledonia's problems mounted, the firm's principals then siphoned off virtually all of its remaining assets for no consideration to new companies they created, managed and controlled, leaving behind a shell that had unaudited assets of US$269,113 and liabilities that management listed as US$57,391 but which, in reality, will include the full amount of Georgiou's trading losses.