Prospero Markets to be wound up, liquidators appointed

The Federal Court orders the trading platform with links to Changjiang Currency Exchange be wound up following an ASIC investigation.

A court has ordered Prospero Markets be wound up.

The Federal Court has ordered forex and CFD trading platform Prospero Markets to be wound up, with liquidators appointed as $19m is still owed to clients.

At a court hearing on Wednesday, judicial registrar Tim Luxton handed down orders including winding up the OTC derivative issuer, which has links to the Changjiang Currency Exchange that was raided by the Australian Federal Police over money laundering concerns last year, and appointed Andrew Cummins, Jonathon Keenan and Peter Krejci, of BRI Ferrier, as liquidators.

Prospero’s ongoing failure to appoint an auditor, its failure to lodge financial statements and audit reports for the 2023 financial year, and its failure to report transactions data were among the most significant issues raised in the case, Mr Luxton said ahead of handing down orders.

“I have no confidence that (Prospero) will appoint an auditor in the future. This is, for an AFS licence holder, a very significant omission … It is a continuing obligation which Prospero has been in breach of for a substantial period,” he said, noting the company’s arguments that it had unsuccessfully sought to bring on a new auditor.

“Prospero has had very substantial commercial activities and proper reporting of those activities goes to the very heart of their regulation. In my view Prospero’s failure to lodge financial statements and an auditor’s report in respect to the financial year ending 30 June, 2023, is a significant matter,” he added.

The trading firm had also not provided an adequate explanation as to why it had not lodged client money declarations and reconciliations, Mr Luxton added.

“I have a lack of confidence in the conduct and management of the affairs of Prospero.” he said.

“Regulatory breaches of the Corporations Act appear to have occurred. These breaches are in many instances continuing.

“ I am not confident these continuing breaches will be addressed adequately in the future. There is, therefore, a risk to the public interest that warrants protection.”

With Prospero having ceased trading and owing $19m to 2500 clients, Mr Luxton said he found the court appointment of a liquidator to be highly desirable.

The Australian Securities and Investments Commission began an investigation into Prospero in October following AFP raids of the company, “which resulted in former officers and responsible managers of Prospero being charged with money-laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain’’.

The AFP raids involved more than 240 AFP members and 92 specialist members executing 20 search warrants across every mainland state, and restraining more than $50m in property and vehicles as part of Operation Avarus-Nightwolf.

Prospero’s AFS licence was suspended in December after the company failed to lodge its 2023 audited financial accounts.