Halifax Investment Services Chinese operation shut down by administrators, US branch still operating

The Chinese branch of a failed Halifax Investment Services, run by a Gold Coaster, has been shut down, while $211 million of investor money remains frozen. But questions remain over Halifax America.

Jeff and Pat Worboys in The Dome VIP at Magic Millions.

ADMINISTRATORS have shut down the Chinese branch of Halifax Investment Services, and have looked at its American operations, as $211 million of investor money remains frozen in trading accounts.

ASIC suspended the financial services licence of the company, run by Gold Coast man Jeff Worboys, last month.

Administrator Morgan Kelly, of Ferrier Hodgson, said Halifax Asia had been “entirely closed down”.

“We have secured all the assets out of China, which were largely computers and office equipment,” he said.

“The Chinese bank accounts have either been closed or frozen.”

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Halifax Investment Services has gone into administration. Photo: Supplied

Mr Worboys, was photographed with wife Pat enjoying the Magic Millions in The Dome VIP marquee earlier this month, continues to part-own and oversee Chicago-based Halifax America LLC — an entity Mr Kelly said the administrators were continuing to investigate.

The US entity was “permanently banned” by US regulators in 2014 for operating without a licence, however has since obtained a licence and is using the same logo and running the same trading platforms as the failed branches in Australia, New Zealand and China.

The online database for the US Financial Industry Regulatory Authority yesterday listed Australia-based Halifax Investment Services owner of 50-74 per cent of Halifax America.

However, Mr Kelly the administrator said Halifax Investment had sold its share of the American entity.

“Halifax (Investment Services) doesn’t have an interest in Halifax America,” he said.

“(But) it is a source of ongoing investigation for us.”

Former director of Halifax Investment Services Andrew Baxter remains a shareholder of the company.

The fund had more than 12,000 trading accounts belonging to more than 10,000 clients in Australia, New Zealand and China when it collapsed in November, and administrators have identified a shortfall in client funds of up to $25 million.

Halifax has also been drawn into what has been described as “Australia’s biggest Ponzi scheme”, Courtenay House Capital Trading — which took $209 million from 780 investors, including the Mayor of Sydney’s Sutherland Shire.

Courtenay House was set up in 2015, with Halifax Investment Services as broker.

Liquidators of Courtenay House received approval from its creditors in June to set aside funds to “bring an action and/or claim” against eight people and companies, including Halifax.

Mr Kelly said he’d been in touch with the Courtenay House liquidators, but was unable to comment publicly about any potential impacts on creditors or investors of Halifax.

“That’s subject to an ongoing investigation,” he said.

The administrators said they were investigating a possible deed of company arrangement with a view to shortening the time frame for investor funds to be released and were also looking into whether investors were eligible for an insurance claim.

Creditors will receive a detailed report from the administrators in mid-February, including recommendations on whether the Australian and New Zealand companies should be placed into liquidation, with a creditors meeting to be held after the report is released.