This is a guest post by Bruce Packard, a former banking equity analyst turned financial columnist. In this piece, Packard examines the collapse of AIM-listed FX broker Argentex — an apparent victim of tariff-driven volatility, but more crucially, a case of flawed risk assumptions being brutally exposed.
At the end of April, Argentex — a London-listed foreign exchange broker operating under the “riskless principal” model asked for its shares to be suspended.
The reason? A sudden bout of dollar weakness had triggered margin calls on the firm’s FX forwards and options positions. Within days, the Board announced a fire-sale takeover by competitor IFX Payments, valuing Argentex shares at just 2.49p — a staggering 94 percent collapse from the pre-suspension price. The entire company, once hailed as a prudent steward of corporate FX exposure, was now worth a mere £3 million.
Alongside the announcement, Argentex secured a £20 million revolving credit facility and an emergency £10.5 million bridging loan — carrying an eye-watering 15 percent annual interest. The CEO, Jim Ormonde, exited the company with immediate effect. No farewell statement. No thanks. Just silence.
Not so riskless after all
Argentex had always pitched itself as a low-risk facilitator — never taking speculative positions, only matching client flow as per its “riskless principal” model. The strict definiition of what that involved, according to its own admission document, was “trade in a security that involves two orders, with the execution of one order dependent upon the receipt or execution of the other”.
And yet, this supposed conservatism masked staggering balance sheet deterioration. At year-end in December, the company reported £18 million in cash. Four months later, it was scrambling for survival.
Even the cash flow statement for FY December 2024 painted a reassuring picture: £17 million of net cash from operations. So where did it all go? The company’s RNS explaining the suspension was, to put it mildly, opaque. Direct inquiries to investor relations and the firm’s financial PR were met with stony silence.
According to a Bloomberg investigation, Argentex had been required to post collateral (margin) with its counterparties — namely Barclays and Citi — on forward trades. Normally, a broker would mirror that margin arrangement with clients, mitigating risk. Indeed, Argentex’s own admission document (p. 43) had promised: “robust margin call terms are maintained with clients.”
But the reality was starkly different. Argentex had reportedly offered “zero-zero” margin terms — no initial margin, no variation margin — to attract corporate customers. In other words, Argentex was fronting the risk without demanding any skin in the game from its clients. The firm’s more recent disclosures even walked back previous clarity, replacing plain statements about risk practices with ambiguous phrases like “a blend of terms that enable client margin calls.”
Whistling past the steamroller
On April 2, just weeks before the collapse, Argentex management was asked specifically whether Trump-related volatility was having an impact. Their reply? FX volatility was good for business. It didn’t matter which way currencies moved, only that they moved. Treasurers, they explained, were eager to lock in rates.
Later in the same Q&A, the team assured investors that risk management systems were robust, positions were managed daily, and internal credit committees were doing their job. Then—boom. The margin calls hit, and the business disintegrated.
What was missed?
Investors often focus on statutory reporting, but voluntary disclosures — what management chooses to share — can be more revealing.
It is particularly significant if management has been disclosing information, that they then choose to withdraw. This is always hard to spot. If you wander around The City of London, you will see many cranes and new glass buildings – but it’s hard to remember the old buildings that are no longer there, even though you used to walk past them every day on your way to work
Well, in Argentex’s case, it once proudly charted its growing FX turnover in its annual reports. In FY March 2021, for example, two graphs tracked rising trading volumes and revenues.
By the next year, the turnover chart had vanished. Not long after, the “Growth and Profitability” section disappeared too. Like old buildings erased from a changing City of London skyline, their absence became easy to miss.
As the Finnish operatic metal band Nightwish put it: “I studied silence to learn the music.”
Behind that silence lay a business model under strain. As FX turnover grew, revenues did not keep pace. In a liquid and commoditized market, margins compress. Argentex appears to have responded by taking on more risk — offering sweetened “zero-zero” terms to clients in order to keep the top line rising. It was a textbook case of “picking up pennies in front of a steamroller.”
For a time, it worked. Clients were creditworthy, defaults rare. But when the dollar reversed and margin calls surged, the house of cards collapsed. The firm was left with no runway, no credibility, and no exit other than a distressed sale.
The Real Risk Was Ignorance
It’s one thing to make a risky bet and lose. It’s another to assure shareholders — publicly — that you’ve got everything under control, just weeks before going under.
The real scandal here may not be the risk Argentex took, but the fact that its leadership either didn’t understand it — or didn’t think it worth mentioning.
