Prospero Markets wind-up order granted as broker owes clients $19M
The Federal Court of Australia has granted a request made by financial regulator ASIC to issue a formal wind-up order for (formerly) ASIC licensed Retail FX and CFDs broker Prospero Markets Pty Ltd.
Prospero Markets court hearing
At a court hearing held earlier this week, National Judicial Registrar at the court, Tim Luxton, handed down the order and formally appointed Andrew Cummins, Jonathon Keenan and Peter Krejci, of BRI Ferrier, as liquidators. (BRI Ferrier also heads up the handling of the bankruptcy and liquidation of another ASIC licensed CFDs broker, USGFX).
At the hearing, it was noted that initial indications are that Prospero owes approximately $19 million to about 2,500 clients. It is unclear at this stage how much client money is still held at the company, and how much (if any) is missing.
Reasons for Prospero wind-up order
Interestingly, the court’s formal reason for the wind-up is that Prospero hasn’t lodged its financial statements and auditor’s report for the 2023 financial year, and is unlikely to be able to do so. ASIC itself cited similar reasons for suspending Prospero’s ASIC license back in December 2023.
However the “real reason” behind both the license cancellation and wind-up order is that Prospero Markets and its main principals are caught up in a major China based money laundering ring that was recently uncovered by Australia police.
Prospero Markets raided by police
FNG reported exclusively back in November that Australian Federal Police (AFP) raided the offices of Prospero Markets at its Melbourne headquarters, as part of a wider action taken by the AFP against a China based money laundering ring. The AFP’s Operation Avarus-Nightwolf resulted in former officers and responsible managers of Prospero Markets being arrested and charged with money-laundering offences.
Prospero Markets had all its bank accounts frozen at the time, and effectively stopped providing services to clients. As part of the aforementioned AFP raid the sole director of Prospero Markets’ ultimate holding company CJ Prime Financial, Ding Wang, was arrested by the AFP alongside a number of other individuals associated with the company.
The arrests surrounded a nationwide chain of currency exchange outlets called Changjiang Currency Exchange, which the AFP alleges is being secretly run by the Long River money laundering syndicate out of China. The syndicate and Changjiang Currency Exchange are accused of laundering $229 million in the proceeds of crime over the past three years.
BRI Ferrier statement on Prospero
We expect appointed liquidator BRI Ferrier to soon begin communicating with Prospero Markets’ former clients and the public at large, regarding the scope of their operation, including how much money is actually owed to clients, and how much is still around in client (and/or company) bank accounts.
In the meantime, BRI Ferrier shared a formal statement with FNG regarding their appointment. The statement reads:
11 April 2024
PROSPERO MARKETS PTY LTD (IN LIQUIDATION)
Restructuring and insolvency group BRI Ferrier advise that Principals Jonathon Keenan, Andrew Cummins and Peter Krejci were yesterday appointed Joint & Several Liquidators of Prospero Markets Pty Ltd (Prospero) by orders of the Federal Court of Victoria following an application filed by the Australian Securities and Investments Commission (ASIC).
Prospero operated a foreign exchange broking and trading business in Australia. ASIC suspended the company’s Australian Financial Services License (AFSL) in December 2023 after it failed to lodge its 2023 audited financial statements. The AFSL remains suspended at this time.
The Liquidators are undertaking urgent enquiries into Prospero’s financial affairs, including securing the assets and records, with a view to discharging claims from clients, creditors and other parties. The Liquidators will issue reports to the respective stakeholder groups once the position becomes clear. While the Liquidators intend to distribute funds as soon as possible, it is too early to advise when a distribution can be paid.
The Liquidators are aware of reports linking Prospero to Changjiang Currency Exchange and related prosecutions in 2023 and note that the involvement of regulatory bodies and authorities could affect the conduct of the Liquidation.
