Evolve Bank & Trust said Saturday (Oct. 19) that it is preparing to return funds held at Evolve to Synapse Brokerage end users impacted by the Synapse bankruptcy.
To provide information on the reconciliation process and the anticipated timeline for returning funds, Evolve will launch an online resource center on Wednesday (Oct. 23), the financial services organization said in a Saturday press release.
On that day, the resource center will offer information on how the funds will be distributed by Rust Consulting, an Excela Technologies brand, which Evolve has hired to serve as the administrator to disburse the funds to end users. In addition, an email will be sent to users Wednesday.
End users with a balance at Evolve will be asked to select a payment method on Nov. 4, and payments will begin “shortly after,” according to the press release.
“Evolve has been deeply committed to the reconciliation of Synapse Brokerage end-user funds since we identified significant irregularities in end-user balances reported by Synapse,” Evolve Bank and Trust Founder Scot Lenoir said in the release. “First and foremost, we are grateful to the end users for their patience and understanding as we worked through millions of transactional records in the reconciliation process.”
The situation with Synapse Brokerage’s cash management program, where Evolve holds funds, has been complex, PYMNTS reported in June. Evolve held about $46.9 million in accounts that were created for payment processing activities on behalf of Synapse. It was not a program bank for Synapse Brokerage’s cash management program and, therefore, was not directly holding end-user deposits for this program.
Evolve reported identifying “numerous material discrepancies” in the Synapse Brokerage program ledgers that did not align with actual funds movement into or out of Evolve, and the bank emphasized that any single bank could not complete a full reconciliation without more collaborative work across the Synapse ecosystem.
Synapse’s troubles potentially began — or were brought to light — when Synapse’s largest client, Mercury, decided to work directly with Evolve, Synapse’s core banking partner, cutting out the need for Synapse as an intermediary and setting off a chain of events for Synapse’s other clients who relied on the FinTech provider, PYMNTS reported in May.
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