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British fintech Stenn fell into administration after a reference to the company in a US criminal complaint over a Russian money laundering scheme prompted lenders to investigate potentially suspicious transactions, people familiar with the situation said.
Stenn, which specializes in invoice financing and once boasted a valuation of $900 million and partnerships with international banks such as Citigroup and Barclays, last week placed two of its UK units into administration following an application in London’s High Court by HSBC Innovation Bank, one of the are lenders.
HSBC began investigating potentially suspicious transactions at the London-based startup earlier this year after U.S. authorities opened criminal charges in a money laundering case that included references to Stenn and its Russian founder and CEO Greg Karpovsky, according to people familiar with the case. matter.
Stenn’s collapse is likely to draw attention to the due diligence being carried out by its banking partners and major investors, especially as a former accountant for the fintech had resigned over concerns over certain transactions and Karpovsky was previously involved with a Russian invoice finance company which later collapsed due to fraud allegations.
Citigroup announced in 2022 that it had entered into a partnership with Stenn to “close the financing gap” for small and medium-sized businesses. That same year, US private equity firm Centerbridge Partners invested $50 million in the company’s preferred stock at a valuation of $900 million.
HSBC Innovation Bank’s exposure to Stenn is primarily through a revolving credit facility signed with Silicon Valley Bank UK, which was acquired by HSBC following the collapse of the US regional bank in 2023.
Stenn and Karpovsky were not accused of any wrongdoing in the US criminal case, in which they were not the suspects.
The references to it in the indictment in that case triggered HSBC to begin a deeper investigation into the fintech’s transactions, which the people said revealed potentially suspicious transactions.
US authorities alleged in one of the indictments that Stenn Assets UK, one of the companies placed under receivership, received $1.7 million in October 2020 from a Singaporean company linked to Feliks Medvedev, a Russian national who pleaded guilty earlier this year advocated managing money without a license. transmission company that transferred more than $150 million in Russian money.
Karpovsky’s personal email address was listed in another indictment as linked to a trading account at a Singapore metal exchange used in the scheme.
In addition to Medvedev, US authorities have charged two other Russian nationals for allegedly conspiring in the scheme – accusing them of crimes including money laundering – while the US Treasury Department last year imposed sanctions on one of these alleged co-conspirators and his company .
Karpovsky told the Financial Times that he was “cooperating” with Stenn’s directors and that it “would not be appropriate” to comment on that process.
“However, I am clearly concerned about any allegations of impropriety against me and I deny any wrongdoing in connection with Stenn,” he added.
Citi, HSBC, Barclays and Centerbridge declined to comment. Bloomberg previously reported that HSBC had discovered questionable transactions at Stenn without mentioning the charges.
In 2018, Stenn’s auditor, EY, resigned due to “concerns about certain related party transactions” and the “sufficient explanation” provided by management, according to a publicly filed letter.
Before founding Stenn in 2015, Karpovsky was the founder and CEO of Eurokommerz, an invoice finance company that went bankrupt after defaulting on its debts in late 2008.
In 2010, US hedge fund HBK Investments sued Russian investment bank Troika Dialog, arguing that Eurokommerz was a “massive fraud” that was “built on fake customers and non-existent claims”. Troika, a shareholder of Eurokommerz, denied the accusations. HBK later withdrew the lawsuit in New York.
Karpovsky told the FT that “any possible misconduct in that company has been proven to have occurred long after my departure from the company.”
Karpovsky was also a director and shareholder of another British fintech company that collapsed this year after potentially suspicious transactions involving Russia came to light.
Silverbird Global entered bankruptcy in March after its “management team discovered that certain payments to its intermediaries in 2022 and 2023 could potentially breach financial sanctions prohibitions” relating to Russia, according to a report by its administrators.
Shortly after Silverbird filed for bankruptcy, CEO and founder Maxim Faldin – also known as Max Grossman Yavorsky – joined Stenn as the company’s new Chief Customer Officer.
Faldin did not respond to a LinkedIn message seeking comment.
Additional reporting by Emma Dunkley