Bank accounts held by account holders at Chimes Bank account holders will be closed by the end of the month, a subsidiary of Chimes Financial Services said on Monday.
Chimes Bank, a bank with branches in the United States, Canada and Europe, said that by the time of the close of its banking holiday, accounts with less than $5,000 in assets will be subject to closure.
Chimes Financial Service, the company that runs ChimesBank account holders accounts, said it will also close accounts for people with over $5 million in assets, who are currently under contract to Chimes.
“We will close all accounts associated with this account, including those that have been previously held by Chimes customers,” Chimes said in a statement on its website.
“We apologize for any inconvenience this may cause to our customers.”
The move comes after the U.S. Department of Justice and the Securities and Exchange Commission in late May sued Chimes on behalf of more than 5,000 Chimes account holders, alleging fraud and deceptive practices.
The U.N. agency charged that Chimes and its parent company, Chimes Capital, were not following all of the financial rules set out by the Financial Institutions Regulatory Authority (FINRA), which regulates financial institutions in the U,S.
and Canada.FINRA, the U-T San Diego newspaper reported, said the complaint alleges that Chime had not followed the rules when it came to managing its customer funds.
The suit was filed in federal court in San Diego, with the United Nations and the National Coalition of United States Banks (NCUB) representing Chimes as defendants.
Chime is part of the banking industry, with more than 50,000 banks and financial institutions providing services to people, businesses and governments worldwide.