Worth over $700 million at some point, Migom Bank once was the rising star of the Dominica-based fintech sector. However, it didn’t take long until the pandemic-era success story turned into a disaster for shareholders.
In addition to a failed venture into the Baltic International Bank that ended with a raid by Latvian authorities, a lack of communication with clients, regulatory scrutiny, and dubious business deals have been haunting the neobank in the past few months. In the meantime, there is an ongoing fight between a group of concerned investors and Thomas Schaetti, Migom Bank’s President and CEO, who has been exercising sole control over the institution and its holding company for the last 1.5 years.
As the Migom’s story is not over yet, our team contacted Dominica’s regulators, as well as the neobank’s shareholders, clients, accountants, lawyers, and other stakeholders to investigate the current status of the business. We have compiled all the information we came by in this follow-up report – the next chapter of this puzzling saga.
A Never-Ending Battle
The battle between Migom Bank’s investors and Thomas Schaetti seems to haven’t come to a close yet. Currently, the feud is at a stalemate, and those involved are awaiting the pending resolution of the Austrian courts.
According to the lawyers we’ve talked to, the verdict could be issued at any minute. However, as Austria’s court system is rather unpredictable and judges are currently overwhelmed with pending court trials, we may need to wait multiple weeks, if not months, to get the decision.
While a court verdict is pending, Thomas Schaetti has reportedly gone out of his way to combat the legitimate transfer of shares to new investors. The attempts of the Migom Bank CEO and President include making prank calls and threatening attorneys that represent the group of investors. This makes Thomas Schaetti’s role in the neobank even more controversial and bizarre.
As his duty is to help Migom Bank survive the ongoing crisis, it doesn’t make much sense for him to hinder these efforts and block new funding from investors. Besides the above allegations, rumor has it that Thomas Schaetti has assisted with false police reports and smear articles in online media outlets.
Regarding the latter, a smear article claimed that one of Migom Bank’s original founders had transferred €120 million of the neobank’s assets into a cryptocurrency cold wallet. However, we noticed how this publication pictured this person as a villain. It was simply too obvious.
Next, we examined the financial statements the neobank officially published on the US Securities and Exchange Commission’s (SEC) website. Besides that, we also wanted to look at the financial statements submitted to Dominica’s financial regulatory authorities (where Migom is licensed).
The Mysterious €120 Million
Our Migom investigation is far from over. That said, we are ready to present the first results, which are rather astonishing. Based on the financial statements the neobank’s holding company filed with the SEC, Thomas Schaetti was the one to certify Migom Bank’s assets, which were only valued at approximately €20 million at the time. An even smaller amount was cited in the Dominican filings.
This raises the question: where did the smear article’s €120 million come from? We identified two potential solutions to this mystery:
- The €120 million was simply made up to confuse investigators, diverting their attention from the real issue that clients’ funds are missing.
- Thomas Schaetti attempted to discredit someone else, making that person the villain in the eyes of the public. However, he accidentally blurted out a small piece of truth, which indicates that a massive amount of client funds were moved off Migom Bank’s balance sheet.
Based on the results of our investigation, the second scenario is more likely to be true. In fact, we believe the potential destination of this “off-balance sheet money train” could be a Luxembourg-based company whose sole owner is Thomas Schaetti. To shed more light on this mystery, we have made some requests to regulators and tax authorities and are currently waiting to receive their disclosures.
A Looming Legal Case in the US
To make matters worse, the neobank’s unhappy customers seem to leave no stone unturned to reclaim their assets. They plan to accomplish this goal by filing a legal case with assistance from Dominican regulators.
Besides clients, Migom’s holding company’s US-based shareholders have also become dissatisfied with their stock’s negative price movements, fostered by those whose primary task was to benefit shareholders. And this didn’t happen for no reason. Between April 2021 and December 2022, Migom Global Corp’s stock (MGOM) was valued at approximately $100 per share. Now, its price has fallen significantly to as low as $10, representing a negative ROI of -90%.
To make things worse, the Financial Industry Regulatory Authority’s (FINRA) and the SEC’s potential decision to terminate the holding company’s publicly traded status could make MGOM stocks worthless in the eyes of investors. Such a ruling can happen at any time, especially if we consider that Migom Bank’s management failed to file mandatory disclosures or financial statements with the SEC for more than a year. Also, the neobank stopped communicating with the holding company’s shareholders. There’s no ongoing effort from the management that could help Migom Bank survive its current crisis.
Based on what we have gathered throughout our investigation, more than 60 of Migom Global Corp’s shareholders are currently in active negotiations with their lawyers. Thus, a class action lawsuit will likely be filed in US federal court to disclose relevant information and recover the potentially substantial damages inflicted on the organization.
While this article was being prepared for publication, reports emerged that Dominica’s regulators had finally run out of patience. By regulatory decree, Thomas Schaetti was removed from the management of Migom Bank, and an independent administration has been appointed to steer the bank out of its current stagnation.
It appears the newly appointed administrators are independent lawyers and auditors based in London, UK, with extensive experience in high-profile insolvency cases. Hopefully, they will soon unravel the mysteries surrounding Migom Bank. Stay tuned for the official announcements, which, as our sources inform us, are imminent at any moment.
