Thursday 10th May 2018
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Arena Capital director Jimmie McNicholl and Lance Ryan have pleaded guilty to defrauding about 900 people out of $8.3 million in a Ponzi scheme posing as a foreign exchange trading platform.
McNicholl pleaded guilty to obtaining registration as a financial services provider by deception, a charge Ryan pleaded not guilty to, although Ryan admitted charges of false accounting, forgery, reproducing documents with intent to deceive and theft by a person in special relationship, the Serious Fraud Office said in a statement. The pair will be sentenced in the Christchurch District Court on June 20.
"Arena Capital used the illegally obtained financial services provider registration to give the impression that BlackfortFX was a legitimate forex trading platform but no trading was ever undertaken," the white-collar crime investigator said in a statement. "About 900 people invested approximately $8.3 million into what was, in fact, Ponzi scheme."
In May 2015, the Financial Markets Authority got an asset preservation order and appointed a receiver and a liquidator. Arena Capital was liquidated the following year and found to have received more than $9 million from more than 1,100 clients. It had $728,000 in its bank account when it was frozen by the authorities and four vehicles, including three luxury vehicles, were seized.
The latest liquidators' report from March of this year shows there were 96 investors who received more form Arena than they put in, totalling $2.5 million, of which the liquidators had recovered $943,000. KordaMentha's Neale Jackson and Grant Graham estimate the jilted investors and creditors will get 34 cents in the $1 back.
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