From rebound to rescue: how Argentex collapsed on untested currency swings

Charlie Conchie, Stefania Spezzati and Nell Mackenzie

Tue, May 6, 2025, 4:42 AM 6 min read

By Charlie Conchie, Stefania Spezzati and Nell Mackenzie

LONDON (Reuters) -In early April, Argentex's chief executive Jim Ormonde and chief financial officer Guy Rudolph were buying shares in the London-listed foreign exchange broker as the stock rebounded from a March slump.

Ormonde, installed 18 months earlier amid a flagging stock performance, said in an April 2 statement on the company's annual results that Argentex had "reset" in 2024 and was now "well placed to return to profitable growth." In the year to date, its shares had rallied more than 50%.

What followed was a dramatic swing in financial markets and a dizzying decline in the company's liquidity position.

Within weeks, Argentex would become one of the first high profile corporate victims of market volatility set off by the global trade war. IFX Payments took over Argentex in a rescue deal for just a fraction of what it had been worth, and the CEO and CFO have gone.

Argentex declined to comment. UK-based IFX did not respond to requests for comment.

April 2 was also "Liberation Day," when U.S. President Donald Trump unveiled sweeping reciprocal tariffs against numerous countries, triggering heightened volatility for trading firms as currency markets moved widely.

The safe-haven Swiss franc surged roughly 7% against the U.S. dollar during April, while Deutsche Bank's currencies volatility index, a measure of currency swings, rose as much as 28%, to its highest level in two years.

Argentex had navigated previous big market routs such as the fall of sterling against the dollar in 2022, Brexit and the COVID-19 pandemic.

But while it had done scenario modelling and stress testing, it hadn't planned for the dollar's rapid devaluation against many major currencies, according to two people familiar with the company. They spoke on condition of anonymity because the information was private.

Argentex was most exposed to a sudden strengthening of the pound, Swiss franc and the euro against the greenback, one of the people said.

ZERO-ZERO LINES

In its 2024 annual report, Argentex said that "regular stress testing is performed to ensure the group has sufficient collateral pledged and other unencumbered resources to cover its current and potential obligations in the event of a significant market movement."

Yet when the market moved against it, Argentex was left exposed to cash calls from its liquidity providers and unable to call margin from many of its clients due to its use of zero-zero lines, according to the person.